Top Green Stock Picks for 2012

The stock market has not performed well in 2011 and green stocks are no exception. If the US can maintain its current trajectory and Europe can avoid slipping into recession, 2012 may prove to be a better year for the alternative energy and cleantech sector. The overall environment was not the only drag on stocks in 2011, the Chinese flooded the market with cheap solar panels, bringing the price down and taking some solar companies with it.

Canaccord Genuity has its “Best Ideas” list for the CleanTech sector in 2012 and they are focused on companies which are adopting trends for technologies that optimize energy creation and consumption.

Some of their top picks for 2012 include Itron, Inc. (NASDAQ: ITRI) and Acuity Brands, Inc. (NYSE: AYI). Another one of their top picks is a Canadian company by the name of RuggedCom.

Itron, Inc. (NASDAQ: ITRI) was maintained as Buy: “…we remain decidedly contrarian as shares continue to trough, yet the multi-year Smart Grid product cycle continues to unfold through mid-decade. We favor the company’s strong market share and FCF generation capabilities (10%+ FCF yield), ongoing restructuring efforts, share buyback and active M&A program against current investor concerns about ’12 & ’13 EPS power and European exposure. We find recently reinstalled CEO LeRoy Nosbaum acting with an appropriate degree of urgency to catalyze value creation at the current share price.”

Acuity Brands, Inc. (NYSE: AYI) was maintained as Buy: “We believe that LEDs will help accelerate Acuity’s traditional sales over time while growing to become accretive to the business model. As such, we see the potential for $3.50 to $4.00 in earnings power per share in 2013/2014 as the secular trend starts to manifest. We remain aggressive buyers on pullbacks from the fits and starts in the non-residential construction markets, and we view 2012 as the right time to build a meaningful position in the shares.”

RuggedCom is a Canadian company which trades as “RCM” in Toronto and Canaccord Genuity noted, “We find management execution impressive, as RuggedCom continues to generate above-market growth with industry-leading profitability. The core industrial switch/router business continues on its growth trajectory, while the achievement of profitability within the wireless business is a notable milestone… we find risk/reward attractive here.”

For more information go to the Canaccord Genuity site.

© 2012, Richard Matthews. All rights reserved.

Related Post
Investing in Green Economic Growth
Eco-Investing
Sustainable Stock Offers More than Extraordinary Returns
Sustainable Investing and Long Term Thinking
Sustainable Stock

Read More»

International Impact Investing Challenge

The Johnson Graduate School of Management and the Kellogg School of Management have joined forces to launch the 2011 International Impact Investing Challenge. This competition is unique because it challenges MBA students to solve the world’s biggest problems – poverty, climate change, ecosystem degradation – with innovation and entrepreneurship.

The competition will challenge MBA students to achieve economic returns that support progress on global impact issues. Teams from a dozen top MBA programs are competing for more than $40,000 in awards in a final event at J.P. Morgan in New York City on April 8.

The International Impact Investing Challenge is an invitation-only pitch competition focused on designing investment vehicles that create sustainable impact and are of the size and scope that would be of interest to institutional investors. Students are challenged to propose and defend a sustainable investment strategy for an institutional investor that has a $10 to $50 million mandate for making sustainable investments.

Twelve MBA programs will be invited to send one team to represent their program at a final competition at the J.P. Morgan headquarters in New York on April 8, 2011. A selection panel of experienced investors and officers who currently manage family foundations, pension funds, university endowments, etc. will review the pitches. Judging criteria rewards high performance, sustainability-driven investments. Portfolios will be judged for an understanding of the interdependence among business, society and the environment for a competitive advantage.

March 18, 2011: Schools submit names of their representative by 5pm EST

March 25, 2011: Teams submit a two-page prospectus via email by 5pm EST

April 8, 2011: Final Competition in NYC and winners announced8am-3pm: Final Presentations,5pm-7pm: Award Reception

Guidelines

An increasing number of institutional investors have recognized an opportunity for a sustainable investment mandate within their portfolios. Specifically, the investors seek to identify investment strategies that can meet the financial needs of the organization by investing in established businesses, new ventures, or other investment vehicles that are consistent with the principles of sustainability. Emphasis will be placed on creative strategies that integrate environmental, social or corporate governance (ESG) issues into the investment process. The officers will consider a broad range of strategies, from those focused on global concerns to those that give attention to local communities. The best proposals will offer a novel investment strategy over current approaches. Teams are encouraged to think beyond venture capital fund vehicles & strategies.

Institutions seeking investments may include but are not limited to:

• University Endowments
• Retirement and Pension Funds
• Family Foundations

Assume all institutions have earmarked $10-50 million for this new mandate and are now seeking proposals for investment. The institutions are looking for a clear articulation of an investment strategy that addresses the following criteria:

• Investment is designed to generate both competitive returns and positive social and/or
• environmental impact.
• Risk management is commensurate with target returns.
• Investment is attractive in respect of size and scope to institutional investors with a $10M mandate.

Performance metrics for both the financial and social return components are transparent and well-defined, demonstrating clear linkage between program outcomes and social impact. Particular consideration will be given to strategies that design a portfolio that balances risk and positive returns related to financial, environmental and social factors. The institutions are open to multiple asset classes, including but not limited to:

• Public equities
• Private equity/venture capital
• Real assets
• Fixed income securities
• Microfinance lending and investing
• Loans

Any strategy should consider the following issues:

• Who are the potential investors and how/why does the vehicle fit within their strategy
• Potential volatility of market value
• The lock-up or time commitment required
• Financial returns
• How the strategy fits within the target institution's portfolio
• The larger scale environmental and social impact of the investment

The Challenge is looking for innovative investment ideas that balance the tension between financial and social return rather than sacrifice either priority. There is no limitation on asset class or investment vehicle and teams are encouraged to think creatively. The focus is on investment vehicles and fund strategies versus companies.

Prizes

More than $40,000 in prizes will be awarded to the winning teams. Awards will be made for overall proposals as well as those that excel in a specific categories including health, environment and emerging markets.

The First Prize in Environmental Sustainability will recieve a $10,000 McCall Foundation Award.

For more information click here.

© 2011, Richard Matthews. All rights reserved.

Read More»

Green Investment Opportunities in China

Investments by the Chinese government are creating a wealth of green sector opportunities. China's huge business and consumer base is creating demand for everything from renewable energy to green buildings.

A good illustration of the profit potential afforded by China's green market comes from Chan Han Meng, executive director of Nature Elements Capital. According to Chan, Green buildings offer a 30 - 50 percent price premium while additional construction costs are only five per cent.

China is investing $736-billion in sectors like wind and solar. Targeting the best entry points to invest in the Chinese green market involves paying close attention to the sectors that, with government support, can compete with traditional sources of power.

Chinese Government incentives in the wind power sector have reduced the cost to between 0.5 RMB and 0.7 RMB per kilo watt hour. Renewable sources of energy like wind power will skyrocket once the cost per kilo watt hour matches coal, currently about 0.4 RMB per kilo watt hour.

China's green energy economy hinges on making clean energy competitive with coal. The Chinese government is waiting for the Parliament to approve measures that will provide loans, grants and tax breaks that will help make renewable energy cost competitive with coal. To help with this goal, China may even impose tariffs on energy derived from coal.

Up to half a trillion US dollars in clean energy investment capital will be required to meet China's proposed green targets over the next five years. This affords opportunities for investors who want to earn significant returns while helping to green the earth.

© 2011, Richard Matthews. All rights reserved.

Related Posts
China's Green Laws for Business
China's Most Recent Five Year Plan
China can Teach the US About Green Growth
China's Green Investments and Growing Economic Preeminence
Rare Earth Minerals Power the Green Economy and Embolden China's Bid for Dominance
Video: China Leading the Green Economy while America's Democracy is Being Undermined
The Chinese Government is Investing in Clean Energy while the US Congress Dithers
China Showing Leadership America Must Follow
China-US Cooperation: The Way to Recovery
China's Green Stimulus, US/China Cooperation and Economic Recovery
Chinese Green Legislation, Part 1: Progress and Problems
Chinese Green Legislation, Part 2: Solutions and Strategies
Chinese Green Legislation, Part 3: The New Regulations
Taming the Ox: Green Trade and International Cooperation
Green Asia: China

Read More»

China can School the US About Green Growth

America is often viewed as the preeminent world leader, but when it comes to growing the green economy, the US can learn a lot from China. Although China is often criticized as being the world's largest CO2 emitter, it has an average emissions per capita well below those of wealthy economies.

Both China and the US have set emissions goals for 2020. The US has proposed a 17% cut in emissions from 2005 levels while China has proposed a 40% to 45% reduction in carbon intensity (per person) from 2005 levels. The World Resources Institute has said those two efforts would have about the same outcome.

However there is a major difference, China's goal is official policy, America's goal, although announced by the White House, is not official policy, nor has any legislation been passed to attain that goal.

China is making real progress in developing renewable power. In 2008, China got 9% of its energy from renewable resources. It has committed to raise that number to 15% by 2020. But recent reports show that if the current expansion rate continues, solar power alone could reach five or ten times the 15% target.

In 2007, 7% of US energy came from renewable resources and with any hope of legislation crushed by Republican gains in the midterm elections, that number is not likely to significantly increase in the short term.

Three years ago, China met its 20 percent energy efficiency goal and in 2010 and they are creating more stringent goals for 2020. The US has set no firm targets.

When it comes to fuel economy, China is also leading the US. In 2010, America set new Corporate Average Fuel Economy (CAFE) standards at 35.5 miles per gallon, while China achieved an average fuel economy of 36.7 miles per gallon back in 2008.

The Chinese solar, wind and EV industries are leading the world. On the stock market, some of the best gains are coming from Chinese cleantech companies which are present in almost every sector.

As reported in YaleGlobal Online, a comparison of Chinese and US firms indicate that America has lost its competitive edge. In 1998, the US owned 25 percent of worldwide high-tech exports while China’s was less than 10 percent. By 2008, China’s share was 20 percent, with America’s below 15 percent.

The most revealing statistics come from a Bloomberg survey, created in collaboration with the UN Environment Program. This study indicates that China became the largest recipient of renewable energy financing in 2009, attracting more than 20 percent of the US$162 billion invested worldwide in wind, solar, biomass, small hydro, biofuel and marine energy. While such investment in China grew by 53 percent, in the US it shrank by 45 percent.

A study published by the Harvard Kennedy School’s Belfer Center found that, unlike the US, China coordinates and supports energy R&D through government owned enterprises.

By some estimates, investments in renewable-energy assets may total US$2.3 trillion by 2020. If America is to compete with China for the lucrative green market and all the jobs that come with it, the US will need to develop a much more coordinated approach.


Related Posts
Green Investment Opportunities in China
China's Most Recent Five Year Plan
Video: China Leading the Green Economy while America's Democracy is Being Undermined
China's Green Laws for Business
China's Green Investments and Growing Economic Preeminence
Rare Earth Minerals Power the Green Economy and Embolden China's Bid for Dominance
The Chinese Government is Investing in Clean Energy while the US Congress Dithers
China-US Cooperation: The Way to Recovery
China Showing Leadership America Must Follow
China's Green Stimulus, US/China Cooperation and Economic Recovery
Chinese Green Legislation, Part 1: Progress and Problems
Chinese Green Legislation, Part 2: Solutions and Strategies
Chinese Green Legislation, Part 3: The New Regulations
Taming the Ox: Green Trade and International Cooperation
Green Asia: China

Read More»

Government Incentives are Growing Renewable Energy

The evidence indicates that government investments have significantly helped the US renewable energy market. The American Recovery and Reinvestment Act (ARRA) of 2009 provided $94.8 billion for clean energy. The program was established under section 1603 of ARRA, and provided cash grants covering 10% or 30% of the total cost of developing new renewable energy facilities.

ARRA investments also funded research projects to develop next generation renewable energy technologies. These types of innovations create a cost competitive alternative to dirty sources of electricity while simultaneously creating long-term economic growth.

Due in large part to ARRA, the renewable energy industry survived the worst financial crisis in decades and is making significant progress toward attaining its goal of doubling renewable generation capacity over two years.

According to Gisela Kroess, a director at UniCredit SpA (UCG.MI), "[ARRA incentives have] spurred a lot of the growth we've seen," she said at a renewable-energy finance conference.

Despite Republican opposition, the US Department of the Treasury's 1603 cash grant program for the solar and wind industries was extended through 2011 as an add-on to the 2010 Tax Relief bill. The extension provides incentives so that developers of new solar and wind farms will continue investing in new projects beyond those already slated for construction.

ARRA Report Card: Two Years Later, is the latest industry study from market research publisher SBI Energy, it examines the ARRA clean energy investments and their impact on the various clean energy markets within the power, transportation, and building sectors.

Solar Energy

The report card indicates that according to forecasts from the Council of Economic Advisors (CEA), ARRA investments will help the domestic manufacturing capacity for solar photovoltaic (PV) modules to grow from less than 1 GW per year in 2008 to nearly 4 GW per year in 2012. Solar EnergyARRA investments are also accelerating the rate of innovation in solar photovoltaics and will drive down the costs of solar panels over the next five years by as much as 50 percent. According to the Solar Energy Industries Association, ARRA has supported more than 1,100 solar projects in 42 states, creating enough new solar capacity to power 200,000 homes. ARRA has resulted in nearly 40 percent growth in the solar power market in 2009 and nearly double in 2010.

Wind Energy

Despite weak economic and investment conditions, US wind power capacity grew 40 percent in 2009 compared to 2008. In July 2010, the CEA reported that ARRA was responsible for approximately 6 GW of wind capacity installation that might not otherwise have occurred in 2009.

Geothermal Energy

An April 2010 U.S. Geothermal Energy Association (GEA) survey indicated a 26% increase in new projects under development in 2009 and concludes that the stimulus funding played an important role in propelling geothermal growth amidst recessionary economic conditions.

Combined Renewable Energy

The Energy Information Administration (EIA) estimates that US renewable generation capacity will increase 32 percent more than without ARRA, reaching 155 GW in 2015.

The results of this report card clearly indicate that government investment has significantly increased America's renewable generation capacity.


Related Posts
Green Jobs for America
Hot Green Jobs for 2011 and Beyond
Green Stimulus Investments and Job Creation
Government Investment Green Jobs and Economic Recovery
Highlights of Obama's 2011 State of the Union Address: Clean Energy, EVs and Eliminating Oil Subsidies
Video: Green Jobs
Democrats the Environment and Green Jobs
Oakland's Green Jobs and Energy Initiatives
Clean Tech Job Trends 2010 Report: Growth and Global Competition
Clean Tech Job Trends 2010 Report: Manufacturing Issues
Good Jobs, Green Jobs National Conference
Dream Green Job Workshop
Sustainable Brands Conference 2011
Leading the Green Job Market with a Sustainable MBA
How to Land a Green Job
A Green Jobs Bill Will Have to Wait
The Green Job Market
Growing US Corporate Investments are Driving Cleantech in 2010

Read More»

Video of White House Policy Briefing on Green

A January 18, 2011, White House Policy Briefing on the greening of America's cities. This video covers a wide range of government ideas and initiatives, including renewable energy, energy efficiency and retrofits.

Read More»

Green Investing Part 3: Finding and Assessing

Finish Rich has a few useful suggestions for finding and evaluating Green Investments. If you are eligible for a 401(k) plan at work, find out if your “investment menu” includes a green fund. If it doesn’t, speak to your plan administrator and express your interest in having an SRI or a green fund added to your choices.

Begin researching a few green funds Many green funds have posted double-digit returns, and some were up over 30 percent in 2007. This does not mean you should invest your entire retirement savings in a green fund. Many of these funds are narrowly focused and volatile. Others are more broadly diversified. So before you invest, do your research carefully and consider green investing as a piece of your overall financial plan and diversification. A great place to start your research is at Morningstar, which evaluates funds, their diversification, and their levels of risk.

Find out how your current investment holdings perform in terms of sustainability by visiting Climate Counts, a nonprofit organization that brings together companies and consumers in the fight against global warming. Climate Counts provides a scorecard for companies in eight sectors based on their commitment to fighting global warming.

Find a financial planner who specializes in socially responsible investing. Go to Social Investments Forum, and click on “individual investors” to find a financial services directory and other tools.

Next: Green Investing Part 4: Top Performing Green Funds and Resources

Read More»