10 Clean Energy Picks Enjoying the Obama Effect

by: Tom Konrad, CFA

This is the second performance update on my 10 Clean Energy Stocks for 2009. In the first quarter, the model portfolio was up a tiny 1.6%, but still managed to beat the benchmarks handily (by 8% and 9%), since they were both down significantly.

In the last three months, the market has turned around, logging significant gains, but my ten picks have continued to outperform.

Company Ticker

Change 12/27/08 to 7/2/09

Dividend & Interest

The Algonquin Power Income Trust AGQNF.PK +64.97% 8.17%
Cree, Inc. CREE +59.96%
First Trust Global Wind Energy ETF FAN 21.88% 0.46%
General Electric GE -28.24% 3.88%
Johnson Controls JCI 22.14% 1.53%
New Flyer Industries NFYIF.PK +26.23% 5.98%
Ormat ORA +33.27% 0.44%
Trinity Industries TRN -21.97% 0.93%
Warterfurnace Renewable Energy WFIFF.PK +17.77% 2.16%
-2x S&P Depository Receipts + 3x Cash (was SDS until Feb 13) 3x $ - 2x SPY -14.45% -0.16%
Total Portfolio 27.05%


S&P 500 2.59%
iShares S&P Global Clean Energy Index (NASDAQ:ICLN) 13.95%

In the second quarter, the portfolio has added 16.5% relative to the broad market index, and 4.1% relative to the clean energy ETF, for a total of 24.5% and 13.1% outperformance for the first half.

I continue to attribute my outperformance to the Obama Effect, and the fact that clean energy has been outperforming the market as a whole supports this hypothesis. If it's not just luck, the reason I've been beating the clean energy ETF is also probably due to the Obama effect: my picks are concentrated on sectors which are not only green, but likely to deliver the biggest boost to jobs.

My Trades

As readers are well aware, I don't expect market gains to continue, and have been moving into cash. I got called out of most of my Cree position (NASDAQ:CREE), as well as a little of my FAN, shed much of my Ormat position as well (NYSE:ORA), and managed to lighten up on GE when it hit $14.50, but I still like all four companies, and will buy again when I feel the price is right. The others I've been holding, although I sold some calls on Johnson Controls (NYSE:JCI).

If I had to buy any of these stocks today, it would be Trinity (NYSE:TRN).

Despite all this trading, I'm keeping this model portfolio as it is. I expect these 10 to continue to outperform, even if (as I expect) both the market and this model portfolio head down in the third quarter.

Up Next

Stay tuned for updates on my Ten Clean Energy Gambles for 2009 (now slightly outperforming the benchmarks - Q1 update here) and my Quick Clean Energy Mutual Fund Tracking Portfolio (building on previous gigantic gains - Q1 update here) as these come up on 6 months after the articles were published.

DISCLOSURE: The author and/or his clients own AGQNF, CREE, FAN, GE, JCI, NFYIF, ORA, TRN, WFIFF.