The Paradigm Is Shifting; Fossil Fuels Are Becoming Fossils

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Includes: BP, BTU, COP, CREE, CVX, FSLR, GTATQ, HAL, LSCG, NEE, RDS.A, RIG, SPWR, TVIAQ, VWSYF, XOM
by: Lawrence J. Furman

Summary

From 12/21/12 to 9/21/14 my Sustainable Energy Portfolio is up 192%.

My Fossil Fuel reference portfolio is up 13.5%.

The Dow Jones Industrial Average is up 32.0.

The S&P 500 is up 40.6%.

The Sustainable Energy Portfolio crushed the indices while the Fossil Fuels underperformed.

Author's Note. 8/10/14. GT Advanced Technology, one of the companies in my "Sustainable Energy" portfolio, has filed for bankruptcy protection.

On Dec. 21, 2012, I put $16 million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 million in the Sustainable Energy space and $8.0 million in the fossil fuel space. I published my inaugural article on the subject on Popular Logistics, here, my most recent article on Popular Logistics and Seeking Alpha.

While both portfolios are up from Dec. 2012, and both are down from August, 2014, the Sustainable Energy portfolio is up from $8.0 M to $23.3M, or 191.6%. In the same time frame the Fossil Fuel portfolio us up from $8.0 M to $9.1 M, or 13.5%. The reference indices are also up; the Dow Industrials climbing from 13,091 to 17,280; the S&P 500 climbing from 1,430 to 2,010.

This, to me, indicates a paradigm shift.

The Sustainable Energy portfolio is composed of Cree (NASDAQ:CREE) and Lighting Sciences (OTCQB:LSCG) in the LED space, GT Advanced Tech (GTAT), which at the time made solar ovens for cooking PV wafers, and today is diversifying, First Solar (NASDAQ:FSLR) and Sunpower Corp. (NASDAQ:SPWR) in the solar space, Vestas (OTCPK:VWSYF), a wind company, Solazyme (SZYM) a biofuel company and Next Era Energy (NYSE:NEE), a utility.

The fossil fuel companies are the oil companies British Petroleum (NYSE:BP), Chevron Texaco (NYSE:CVX), Conoco Phillips (NYSE:COP), Exxon Mobil (NYSE:XOM) and RD Shell (NYSE:RDS.A), the coal company Peabody Coal (NYSE:BTU), and Haliburton (NYSE:HAL) and Transocean (NYSE:RIG), companies in the offshore oil and oil and gas drilling service industries.

The data are summarized beginning in Table 1, below.

Summary Data
Portfolio 12/21/12 09/19/14 Delta %
Sustainable Energy 8,000,000 23,328,433 15,328,433 191.61%
Fossil Fuel 8,000,000 9,081,164 1,081,164 13.51%
DJI 13,091 17,280 4,189 32.00%
S&P 500 1,430 2,010 580 40.56%
Table 1

The stock price data for the Sustainable Energy portfolio are in Table 2, below.

Sustainable Energy Portfolio - Stock Prices
Item Company Symbol 12/21/12 09/19/14 Delta Delta %
1 Cree CREE 34.0 42.2 8.16 24.00%
2 First Solar FSLR 31.0 80.9 49.87 160.87%
3 GT Adv. Tech. GTAT 3.0 11.2 8.15 271.67%
4 Lighting Science LSCG 0.8 0.2 -0.58 -76.67%
5 Next Era Energy NEE 70.0 95.1 25.14 35.91%
6 Sun Power SPWR 5.4 36.7 31.25 575.51%
7 Solazyme SZYM 8.3 8.3 -0.09 -1.08%
8 Vestas VWS 6.3 40.6 34.24 542.63%
Table 2

The stock price data for the Fossil Fuel Portfolio are in Table 3, below.

Fossil Fuel Portfolio - Stock Prices
Item Company Symbol 12/21/12 09/19/14 Delta Delta %
1 BP BP 42.1 46.5 4.34 10.30%
2 Chevron Texaco CVX 109.7 124.8 15.09 13.75%
3 Conoco Philips COP 58.6 80.6 21.96 37.47%
4 Exxon Mobil XOM 87.2 97.1 9.89 11.34%
5 Royal Dutch Shell RDS.A 69.3 78.8 9.46 13.65%
6 Haliburton HAL 34.7 66.5 31.80 91.62%
7 Transocean RIG 45.6 34.1 -11.56 -25.33%
8 Peabody Coal BTU 26.4 13.3 -13.06 -49.56%
Table 3

The valuation data for the Sustainable Energy Portfolio are in Table 4, below.

Sustainable Energy Portfolio - Valuation
      Value Delta
Item Company Symbol 12/21/12 09/19/14 Delta Delta %
1 Cree CREE 1,000 1,240 240 24.00%
2 First Solar FSLR 1,000 2,609 1,609 160.87%
3 GT Adv. Tech. GTAT 1,000 3,717 2,717 271.67%
4 Lighting Science LSCG 1,000 233 -767 -76.67%
5 Next Era Energy NEE 1,000 1,359 359 35.91%
6 Sun Power SPWR 1,000 6,755 5,755 575.51%
7 Solazyme SZYM 1,000 989 -11 -1.08%
8 Vestas VWS 1,000 6,426 5,426 542.63%
  total   8,000 23,328 15,328 191.61%
Note that the values are in thousands.
Table 4

The valuation data for the Fossil Fuel Portfolio are in Table 5, below.

Fossil Fuel Portfolio - Valuations
      Value Delta
Item Company Symbol 12/21/12 09/19/14 Amount Per Cent
1 BP BP 1,000 1,103 103 10.30%
2 Chevron Texaco CVX 1,000 1,138 138 13.75%
3 Conoco Philips COP 1,000 1,375 375 37.47%
4 Exxon Mobil XOM 1,000 1,113 113 11.34%
5 Royal Dutch Shell RDS.A 1,000 1,137 137 13.65%
6 Haliburton HAL 1,000 1,916 916 91.62%
7 Transocean RIG 1,000 747 -253 -25.33%
8 Peabody Coal BTU 1,000 511 -489 -48.88%
  total   8,000 9,039 1,039 12.99%
Note that the values are in thousands.
Table 5

Disclosure: The author is long CREE, FSLR, GTAT, LSCG, SPWR, SZYM, VWSYF.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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