Post-Bush Rally in Equities sees green stocks UP BIG: FCEL, SOLR, SPWRA

Thursday April 09th 2009 was another stellar day in this new green energy stocks bull market. Here are some clean power companies that delivered yesterday:

A-Power Energy Generation APWR 5.79 +1.32 (29.53%) 189.37M



FuelCell Energy Inc FCEL 2.97 +0.35 (13.36%) 204.98M



GT Solar International SOLR 6.97 +0.82 (13.33%) 995.78M



SunPower Corp SPWRA 26.04 +2.64 (11.28%) 2.24B



Yingli Green Energy YGE 7.31 +0.73 (11.09%) 927.81M



Ener1 Inc HEV 5.75 +0.56 (10.79%) 652.48M



Ballard Power Systems BLD 2.59* +0.21 (8.82%) 212.70M



JA Solar Holdings JASO 3.43 +0.27 (8.54%) 575.86M

Will Google (GOOG) take a bite of First Solar (FSLR)?

First Solar has long been touted as the Google of the photovoltaic solar energy industry. Their pioneering thin film PV solar power technology solution is produced faster and cheaper than most competitors, and sales have grown exponentially. It makes sense now for Google to acquire 5 to 10% of FSLR. Why?

Let me count the ways!

1. What's the point of having a massive cash hoard if you can't pick up some clever pieces when there's a fire sale on? The stock is down over 60% in the Bush crash but will be a primary beneficiary of the Obama reign. 10% of First Solar might go for about US$1 billion, as the current market cap is nine and change.

2. With 17bil in cash and prospects for exponential growth dimmed by widespread financial weakness, utilizing investor capital for strategic equity alliances in high growth situations may be a great antidote. Sure Google will be THE NUMBER ONE beneficiary of a global economic upturn that has all boats rising, but when will that day or month come? Even when it does, the sheer size of GOOG means that it will face similar problems that Microsoft has faced for years, and that is trying to maintain reasonably steady growth while managing expectations, in a mega cap reality. Looking at FSLR, ORA, Suzlon, Vesta etc would make perfect sense for Google.

3. Time to leapfrog the charity and make some real money! It's all fine and dandy that Google.org wants to save the world with its crucial and pioneering work. Still, it befuddled that promising clean energy investments seemed to be owned by the foundation, and it hasn't been clear to me (I haven't researched it so readers are welcome to comment) that the Google shareholders would even be rewarded in the future from this beneficence today.

Now I understand how a company can benefit from having more PHDs than NASA; GOOG saw the crash coming and didn't want to get flack from shareholders for buying into a future dream at the top. In this next phase loans, grants and investments can still come from the foundation, but with the equity portion it will be better to structure these deals as Google Inc. owning 80-90% of the new green energy equity investments, the foundation 10-20%. The non-for-proft arm, which battles global climate change, world poverty and 21st century emerging diseases. and the company will both grow faster due to the sharing of resources and pooling of capital in strategic situations.

4. Lots of high quality alternative energy companies are currently attractive to longer term investors. Here are some names a cash-rich company like Google (or even MSFT (14 bil cash), or AAPL (20+ bil cash) may want to speak with:


First Solar FSLR


Ormat Tech ORA


Vesta Wind


Suzlon Energy


MEMC Electronic Materials WFR


SunPower Corp SPWRA


GT Solar SOLR



Peace 2 ALL!

Joe


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THE 3 Top Green Energy Stocks to Consider Buying Now

Investing directly in growth stocks is a high risk activity; medium risk investors should consider acquiring positions in clean energy mutual funds, as these eliminate most individual stock risk and allow investors to benefit from the sector trend.

The near term risk in the clean power sector is continued downward pressure on oil prices, although somewhere in the fall from the current $93 to an estimated $70 a year from now, the sectors will decouple and green stocks will resume their long-term uptrend. Dollar-cost averaging into renewable power stock funds over the next 6 to 9 months would be very prudent, and the more adventurous may want to wade in over the next 3 to 5 months.

If you are a long term equity investor with a time horizon of 5 to 10 years or longer, consult your investment advisor about adding some of these names to your growth stock portfolio:

First Solar (FSLR)

Normally I find this solar energy market leader a bit pricey, but the past few months of downside volatility in USA and global financial markets have really taken the stuffing out of this industry leader. First Solar is considered the Google of the renewable power sector, in that it is by far the dominant player in the global solar photovoltaics industry. Its patented cadmium telluride thin-film solar technology allows FSLR to produce solar panels and modules more inexpensively than competitors, and this advantage has been translated into a healthy global market share. Although there are concerns about the availability of enough tellurium to meet future demand, my feeling is that FSLR has the financial muscle and wherewithal to scare up what it needs, and likely has future versions of its technology in development that require even less tellurium. Clearly overpriced at its 52-week high of $317, today's (03OCT08) close of 163.19 makes me want to revisit this one. Trading at about 44x estimated 2008 earnings and only 23.4x next year's forecasted earnings, there is still risk to be had but solar energy is here to stay and First Solar is the first mover.

Ormat Technologies (ORA)

The world leader in geothermal energy and remote power, Ormat designs, develops, builds, owns and operates geothermal recovered energy-based power plants, usually using equipment that it designs and manufactures. Not as widely known as First Solar, this is exactly the type of quality American company that will benefit under the wise leadership of Barack Obama over the next eight years. When the Obama rally is in full swing, this stock will likely already be much higher than its current price of $31.40 and on the way to surpassing its year high of 57.93. Trading now at just 27.4 times earnings, it may be a long time before you'll see another opportunity to acquire Ormat at these multiples.

Vestas Wind Systems (VWS.CO)

Down from a high of 700 DKK (Danish Kroners), Vestas at 468DKK (up 47 or 11.1% today!) is a blue-green chip investment for the ages. With over 30% of the growing global wind power market, Vestas gets a premium for its high quality wind turbines and is the Mercedes Benz of the wind energy industry. At 39.8 times earnings, conservative investors may find this company still expensive, but there's a price to pay for greatness, and the time to load up on great firms is when there's blood in the streets. Probably the highest quality company in the entire green energy investing sector, it's time to take a look at Vestas.