New Green Energy Bubble may take years to burst

Considering that the global credit markets collapse deflated a still-forming alternative energy stocks bubble in 2008, the 80 to 90% drops experienced by quality clean green power companies have set the stage for a multi-year rally in renewable power stocks.

New developments in areas such as thin film solar, concentrated solar, wave energy / tidal power, geothermal energy, flywheels, offshore windpower, the list goes on and on, mean that public and private sector investments will provide increasingly cleaner and more diversified energy generation. It is still early days and for those who have not yet set up dollar cost averaging programs into green power mutuals funds, it is a prudent strategy when included in a portfolio including cash, bonds, and even real estate! One great rule of thumb that is an excellent starting place is to utilize your age for the perecentage of assets to be held in cash and government bonds. A 30 year old would have just 30% in these shorter term securities, while a 70 year old finds that over 2/3 of her portfolio will always be secure, if proper rebalancing occurs. If the past year hasn't taught people the importance of rebalancing to lock-in gains, then they are probably not ready to re-invest in battered equity markets to restore the growth portions of their portfolios now. Many will compound the error of not rebalancing before, by not rebalancing now. A very conservative investor should add 15 or 20% to their age, while a more growth oriented longer term investor may want to subtract 10 or 15 years from her age percentage, with the subsequent higher risk / higher reward profile.

My initial prognosis (formed a decade ago when many names were still vencap) that the publicly-traded clean power stocks would top out in 2008/2009 was hastened and deepened by the world financial crunch, so rather than facing a 3 to 4 year rally, we are likely looking at a post-Bush rally in global equity markets that may last 5 to 7 years. Many PV solar and wind energy companies are dirt cheap nowadays, and they and other green power stocks will provide torque to global equity funds for most of the next decade.

Peace 2 all,

Joe College

3 Diversified Stocks with green energy revenue for post-Bush rally

Most clean energy investors are looking for the pure play, the renewable power stock with the potential to be a ten-bagger or more. The top pure alternative energy stocks include First Solar (photovoltaic thin film solar energy), Vestas (top global wind power company) and Ormat Tech (leading geothermal energy stock), but here are some ways to play the global stock market post-Bush rally with more diversified companies that have a strong clean energy component:


General Electric Company (NYSE:GE)

One of the world's biggest companies, GE has seen its market cap fall from $400 billion to 100 bil as its stock plummeted from 38.52 to the current 9.54. General Electric is leading global player in both solar power and wind energy and is also a force in water purification and water desalination technology. The prevailing global doom and gloom means you can pick up shares in this behemoth at only 5.3 times trailing earnings, and their GE Energy division keeps you in the clean power game.

And the yield is 13%!!!


Kaydon Corporation (NYSE:KDN)

If you read KDN's description on Google Finance, you'll learn their products include bearing systems and components, and filters and filter housings, as well as custom rings, shaft seals, linear deceleration products, specialty balls, fuel cleansing systems, gas-phase air filtration systems and replacement media, industrial presses and metal alloy products.

What's not so easy to ascertain is that Kaydon is a major supplier of ball bearings and other components to the wind turbine industry. If you believe windpower has plenty of growth potential on land and offshore, KDN is worth considering for your portfolio.

At Friday's close of 26.54, the stock is less than half its 52 week high of 61.57, trades at a PE of 12.97 and yields 2.5%.



American Superconductor Corp (NASDAQ:AMSC)

Although AMSC is highly leveraged to the wind energy industry, their leading edge programmable power electronic converters and high temperature superconductor (HTS) wires allow them to sell their products to both wind farm developers / operators and to electric utilities in general. A recent sale of their dSVC technology to California utility Southern California Edison (SCE) included this in the press release:

AMSC's dSVC allows electric utilities to optimize power delivery directly at the grid's critical load-serving points by automatically adjusting the reactive power supply in real time to meet their customers' ever-changing electricity demands.

I believe that bodes well for the future, and means that AMSC will likely be working with electricity grid productivity firms such as Comverge (NASDAQ:COMV) and Echelon Corporation (NASDAQ:ELON) .

At 15.48 (down from $47), this high growth technology stock has tremendous blue sky potential.

Keep the faith,

Joe Trainor, CIM, Editor
Green Stocks Investing Blog

More online alternative energy stocks research:

Photovoltaic Solar Stocks Investing

Geothermal Power Company Info

Wind Energy Investing Links

Green Energy Stocks Investing