LEDs Rise as Biofuels Sink (Week Ending 9/19)

Capping a crazy week, broad markets end up, while commodities retreated slightly.

Camino's indices ended the week mixed amid highly volitile trading.

In Biofuels, we again saw the potential for huge losses driven by poor risk management practices applied to hedging strategies. Read more here.

Verasun (VSE) dragged the Biofuels strategy down for the week with a 67 % decline. This is after a 50% bounce the stock received following its announcement it was reviewing "strategic alternatives" in the wake of its hedging loss.

On the up side, LED-Lighting's Cree (CREE) capped its strong week with an upgrade. Oppenheimer's analyst apparently thinks light-emitting diodes are being adopted as a mainstream lighting product. This is a continuing demonstration of the influence of analysts.

I like LEDs. They last a long time (5x a CFL), they have a cool form factor, they don't use mercury, they are rugged, they can be dimmed, and produce very nice light. Unfortunately, commercial LED products are no more efficient then CFLs and currently cost 20 times as much. Their long life doesn't yet offset this high cost. Given time, I expect them to penetrate more lighting applications but we are not there just yet for mainstream use. I'll get excited when their cost start to fall significantly and approach no more the 5x the cost of a CFL.

Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks.

Comments

[bowater:]

i would like led's and CREE too if i bot it last week.

2008 Sep 22 08:05 AM

[NOWHEREMAN:]

LED usage is increasing, especially in HDTV LCDs.

2008 Sep 22 08:44 AM

[NOWHEREMAN:]

One other thing you forgot to mention on CREE, Short interest of 25%.

2008 Sep 22 08:47 AM

[Urbane Gori...:]

I don't get any better life with screw in flourescents than I did with regular lightbulbs.. And there is no issue of disposing lightbulbs in the garbage as there is with CFLs... I think CFLs is just another Ethanol... A scam.

I did however buy 6 screw in LED lights to replace 50Watt halogens mini-spots. Total cost with shipping was $98 as opposed to the replacement cost of $42. The halogens were lasting about 2 months. I expect the LEDs to last years. And the energy consumption is 14 Watts per bulb as opposed to 50.

All in all... The way to go. A caveat! Where I use them are in essence accent lighting in my living room. They bounce off the wood ceiling. And, if I had read the webpage, I would have realized that I could order 'warm white' rather than the blue-white that I did. But, clearly the light of the future..

jegan ;-)

2008 Sep 22 01:27 PM

[NOWHEREMAN:]

Agree fully John. More usage will increase manufacturing volumes and result in lower prices.

I'm getting too old to replace those ceiling lights. I would pay someone to do it if they needed replacing only once every 10 years.

2008 Sep 22 02:28 PM

[Road Runner:]

CREE is a company that can't seem to get its act together. I've been watching them for 5 years. Management can't seem to make the company a consistent winner so I haven't been able to buy any stock.

I've been looking for something in LEDs for about 5 years because the future is very bright (sorry - couldn't resist). I bought Color Kinetics (CLRK) a few years ago because they had aggressive, tough, profit-oriented management. Later, Philips bought them and cashed me out at more than 2x my cost. If only we could get Color Kinetics old management at CREE, then I would buy.

2008 Sep 22 03:44 PM

[bert:]

This may depend on the consumer. Whether they live in a house they own and their income level, but I would argue that LEDs offer advantages over CFLs. LED lights have lenses that can control the light. This leads to better lighting. LEDs do not contain mercury. The Lumens is now up to 90 LM / Watt for the CREE Q2. I think that beats the cfls. (Often 3 Watt LEDs are used, for more power, and they are not quite as efficient more like 50 LM / Watt.) When you include some of these advantages along with savings and maintenance. I think LEDs are already a winner. A very nice recessed ceiling 9 Watt light with Lenses and adjustable head can be as low as 65. It beats a cfl with mercury that flickers.

2008 Oct 19 06:02 AM