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Clean Up with ABM Industries

Thank you again, Paul, as usual, for laying out a thorough look at a company, in this case, ABM, and also presenting a well-thought out options play.

Tapping into Geothermal

Roger, i've enjoyed learning from your insightful articles for Seeking Alpha.

Many articles have been posted here at Seeking Alpha on GEOTHERMAL over the last several months with specific good stock recommendations --especially since this past Spring when the Dept of Energy announced big forthcoming subsidies for geothermal.

You've briefly mentioned ORA, the grand-daddy in this sector, but Nevada Geothermal (NGLPF.OB), Raser Technologies (RZ) and U.S. Geothermal (HTM) are already prominent as the promising juniors in the sector, with likely the most upside shareprice gain looming in the not-so-distant future.

NGLPF's stock is already a double gainer since Spring (up from around $0.60 back then to $1.20 in intraday trading today), steadily moving up in just the last several weeks on news that it had brought its first geothermal plant online earlier than previously announced.

RZ is way down from its this-year heights of over $4 on a dilutive stock offering to pay down debt, but late last year it demonstrated that it could bring its first geothermal plant to operational status in a mere 6 months, far faster than the 1-2 year period previously expected. RZ has many other promising geothermal sites that it is presently developing, with various opportunities for funding the upfront costs (e.g., via power-purchasing agreements or PPAs from electric utilities).

HTM's technicals look pretty good, trending upwards since last Dec. with steadily higher "lows" in its relatively non-volatile trading pattern; after the big jump and shareprice "reset" in late May into June, it has been trading sideways the last two months (mostly over $1.55) and appears due for a big upward breakout as this geothermal sector gets much more investment dollars coming its way (e.g., see the series of articles recently posted here at S.A., "Geothermal Is Getting Red Hot," Parts 1 & 2, by The Green Investor). HTM's CEO was recently interviewed at Wall Street Transcript and reported, "We have currently two producing power plants, one in Idaho and one in Nevada. We are working on developing a new site in Oregon for our third power plant. And then in addition to that we intend to expand the production from our existing power plants in Idaho and Nevada."

In an interview by The Energy Report with Greg Reid (an expert on the sector, director of Clean Technology at Wellington West Capital Markets), which was posted April 19, 2009 here at Seeking Alpha, Reid postulated a NAV of $4-$5 for these and several other junior geothermals, given the fact that they have geothermal leasing rights on extensive land holdings in the western USA and given the fact that the utility companies eagerly want more and more geothermal power as part of their portfolio since geothermal (unlike solar and wind) is a baseload power source, available 24/7.

So any dips below the price of $1.20 for NGLPF (its new high today after a steady climb) and $1.55-$1.60 for RZ (its recent oversold trading price) and $1.55 for HTM would appear to be good opportunities for any investors wanting to take some "play money" (not anything you need over the next 12 months) and turn into potential double, triple or quadruple gaining stocks.

Due your due diligence and read up on Ormat Tech (ORA), Razer Tech (RZ), Nevada Geothermal Power (NGLPF.OB), U.S. Geothermal Inc. (HTM), Sierra Geothermal (SRAGF.PK), Magma Energy (MGMXF.PK), Polaris Geothermal, Western GeoPower, et al. (NOTE: Polaris, Western, GTO, and Ram have joined to create single entity)

Disclosure: i'm long with small positions in nearly all of these companies (somewhat larger investments with ORA, RZ, HTM and NGLPF).

Extraordinary Popular Delusions and the Madness of Crowds

Btw, like Joseph and his clients, I, too, am long certain stocks in agriculture, energy, precious metals, and healthcare, as well as in emerging markets (primarily Brazil [EWZ and BRF] and China [HAO and several ADR stocks]).

Extraordinary Popular Delusions and the Madness of Crowds

Very well written article, Joseph-- thank you. That barter-rate for a tulip bulb in Holland generations ago is a real eye-opener on the irrationality of markets and their investors!

On such irrational markets, in line with your lucid observation about the dot.com bubble, I can provide a revealing personal example:

I vividly remember calling my father in Spring of 2000 and telling him of a relatively unknown young professor, one Robert Shiller, whom i had just seen on CSPAN talking at a bookstore about his new book, IRRATIONAL EXUBERANCE. I myself was no investor or student of the markets, though i do hold a psychology degree and have read fairly widely on progressive economics. Anyway, I informed my father that Shiller was predicting a nasty collapse of the dot-com bubble and the stockmarkets as well. I strongly recommended to my father that he take most of his portfolio and put it in much safer govt treasuries, which at the time were paying well over 6%. Alas, my dear father listened instead to the rah-rah boosterism of the financial media and to his broker at a certain (unnamed here) street brokerage, and so he decided to remain in the market-- primarily within NASDAQ stocks. "I just want to make another 10% in the market over the next few months and then I will re-allocate into safer investments," my father told me.

And then the bubble collapsed. By the time he passed on in Spring 2003, he had lost 60% of the family's portfolio.

The aforementioned (unnamed) street brokerage manager subsequently failed to get the portfolio properly allocated to enjoy the 2003-7 recouping of market losses, and then put this same inherited IRA portfolio into a massive overinvestment within a risky Goldman Sachs "fund of funds" (ominously top-heavy with those terrible financial stocks) when the Crash of Fall 2008 occurred (i had vainly asked the financial manager to get us out of that GOIAX fund in mid-August, six weeks before the Crash).

Having to step in and myself take over the decimated inherited IRA portfolio (with the help of a new financial manager), i got us out of the market entirely in Oct 6, 2008 and then took just the approach you recommend here, Joseph: find great companies with solid balance sheets, great profit/operating margins, and healthy future growth prospects, and then boldly buy them on big dips.

This now seems (as all value investors have previously discovered) to be the only way to insure overall successful investing. And our portfolio has most spectacularly benefitted as a result these last 10 months.

Bottom line: no matter how much one might have willingly or reluctantly participated in market foolishness, there's always a better approach one can take-- using one's God-given smarts to invest in solid, successful companies... and then enjoy the eventual ride up, profit-taking along the way to lock in those gains.

10 Green Energy Gambles: A Q3 Update

Disclosure: i recently sold out of a long position in CPTC.OB for a double gainer, and i also recently added to a long position in RZ at its "new lower price" :-)

10 Green Energy Gambles: A Q3 Update

Thanks for all this, Tom.

Composite Tech (CPTC.OB) has had an upside breakout, marked by a dramatic spike up to more than double its trading range for much of this year (the $0.20 to $0.30 level). The spike is evidently due to news that CPTC had sold off its DeWind wind turbine segment, which, while promising in an ordinary economic era, was an albatross around CPTC's neck during this credit-crisis era. Furthermore, the company seems to be getting more domestic attention (along with continuing attention abroad in several countries) for its state-of-the-art cable line, which is such an easy way for power utilities to save energy.

After predictably correcting from its recent $0.73 spike-high, CPTC seems to have found a new, higher support level in the $0.40 range.

Meanwhile, Raser Tech (RZ) still has several financing opportunities and, according to Zacks.com, looks to be moving forward with exploiting its several considerable geothermal resources via power-purchasing-agree... (PPAs) etc.
RZ evidently has some political support in the general strong favor of geothermal by Obama and Energy Secretary S. Chu, and also support from the Utah political hierarchy (Gov., congressional senators, et al.).

As others have written (such as a few folks at CAPS community), RZ could turn out to be the "ugly duckling" that turns into a beautiful swan with all the support for geothermal sector as a baseline power source for the utilities. RZ is obviously well-positioned here as one of the best junior geothermal companies (albeit financially strapped) along with giant Ormat Technologies (ORA), the big gorilla in the sector.

At a recent price of $1.50 (up from $1.38 on the Zacks.com piece on RZ), RZ would seem to be a fun gamble with expendable "play money" on getting a double or triple gainer over the coming 1-2 years. Some observers think its NAV is up around $6 - $7.

Dow's Biggest Declines: Why October Should Be a Four Letter Word

On the "scariness" of October as an investing month, notice that only 1 out of 8 Oct. "crashes" listed above occurred within the last 22 years, and only 2 out of 8 occurred within the last 72 years.

Decent earnings reports this Oct in most sectors should keep this a fairly healthy month for investment returns in this incipient (albeit anemic) recovery.

The one warning flag is the state of regional banks and defaulting commercial and consumer loans.

If any correction is coming this Fall, i surmise it's only going to be 4% to 8% at worst. We may also be in for yet another positive overall month.

Happy investing!

MLPs in Good Shape, Despite Credit Crisis

It was by following Seth Klarman's moves that, as a fairly new investor, i became interested in Linn Energy (LINE) and Breitburn Energy (BBEP) last Dec. (2008) I promptly took out a large position in LINE (up over 105% percent since doing so) and, six weeks later, a somewhat smaller position in BBEP (despite the subsequent dividend suspension, it's up 53% since i bought BBEP in late Jan.).
Though i'm not flush enough to be invested in Klarman's hedge fund, just following his lead has helped me see a handy shareprice gain in these two positions over the last 10 months.

For the record, my LINE investment was definitely helped by having Barron's magazine just several days later in Dec. 08 strongly recommend LINE, and then Jim Cramer visibly and vociferously got behind LINE and its CEO Michael Linn early in 2009. It sure helps to have these populist cheerleaders come and support any position that one has fortuitously taken.

Btw, readers interested in these U.S. MLPs will likely also want to investigate the various Canadian oi/gas/renewable energy "Canroys," the Canadian royalty energy income trusts, which, despite the looming 2011 tax issues for some of these companies, nevertheless look to become prominent value companies over the coming years (e.g., BTE, PWE, Brookfield Renewable, Boralex Power, et al.).

Raser Reports Steady Progress for Geothermal Projects

In my wide reading on the geothermal sector, i've read, concerning the EARTHQUAKE issue, that experts say 1) "by definition one finds geothermal potential in earthquake-prone areas"; and 2) it is with the Enhanced Geothermal Systems (EGS) method of extracting energy that one might trigger some additional seismic activity.

It is my understanding that Raser Tech (RZ) doesn't use EGS and has, furthermore, found a way to extract energy at lower steam temperatures and so their methods are less "invasive."

Brazil: The Only Market Worth Investing In

Thank you, Danny, for another good article with investable ideas. Glad to hear mention of specific companies, and not just the same ol' really great funds to invest in-- EWZ and BRF.

Ocean Power Heads to Japan

Ucilia, thank you for your article update on the "good, bad and ugly" about ocean power promises and fizzles (or kerplunks), and thank you Jerry for your comment pointing us in what seems to be a much better direction.

Latin American ADRs Up Over 100% YTD

It would be nice if you could also have provided just a sentence or two on each one (even just a few phrases) so we have a better idea of which stocks are in sectors interesting to us.

But thank you for all the leads you've given us.

And yes, isn't EWZ (and Brazilian small-cap BRF, etc) amazing? More than 70% gain in just the last 6 months.

Acorn International: Surprising Short-Term Growth

Thank you for this, Saj. I waited to buy a bunch of shares of ATV around $3.90 - $3.99 on a major dip after it had been trading in the mid-$4 range in July-Aug. ATV then plunged further into the low $3 range.

Yes, the speed with which it zoomed back up has been quite remarkable, not unusual with these Chinese emerging stocks this summer-fall.

And yes, i sold most of my shares (tried to sell all my shares) at the $6.05 level, not trusting the "spike"-like action of the stockprice.

It's always so helpful to lock in those big sudden gains and then see if one can re-buy later at a lower price.

Brazil: Riding the Crest of Recovery

Disclosure: long both EWZ and BRF.

Brazil: Riding the Crest of Recovery

Investors interested in Brazil can, of course, focus on iShares Brazil fund (EWZ), which is more oriented to Brazil's commodity and export markets, and, for a play on Brazil's own growing middle class and domestic consumption, focus on the hot small-cap fund, BRF.

Predictably, both are performing wonderfully well this year, with a LOT more upside most likely to unfold.