Research firm Canaccord Genuity, who we work with to produce our green investing newsletter, Progressive Investor, offers its top green stocks for 2011.
They expect a bullish, volatile commodity environment to drive demand and innovation in green technologies, even as political and fiscal policy issues remain uncertain.
The Smart Grid group was in transition with investors this year because of a post-stimulus slowdown, election inertia and project delays. Valuations and relative expectations are lower, resulting in an attractive investment opportunity.
Itron (NASDAQ:ITRI), perhaps the best known smart meter stock, is approaching bottom. Orders have been thin, but ITRI is poised to deliver solid earnings momentum and margin expansion as on-going projects proceed.
Elster (ELT) is less well known and undervalued. It dominates in industrial gas metering solutions and has a solid backlog and project pipeline.
EnerNOC (NASDAQ:ENOC), the industry leader in demand response, is expanding its market share in the US and abroad.
In Lighting, Universal Display (NASDAQ:PANL) should benefit from 2011 being a break-out year for OLEDs.
In Recycling, metals recycler Schnitzer Steel (NASDAQ:SCHN) will benefit from strong industry fundamentals as prices are trending higher and supply is constrained.
In Green Building, NCI Building Systems (NYSE:NCS) is positioned to capitalize on recovery in non-residential construction. The company supplies "cool" roofs, insulated metal products and other greeen building products.
Water continues to be an attractive investment theme, even with municipal spending challenges. There's a potential push for a national infrastructure bank.
Even with very strong recent stock performance, Nalco (NYSE:NLC) continues to impress because of its core competencies in Energy and Water markets.
Disclosure: I am long ITRI.