FOR NEW ENERGY INVESTORS

Ten Clean Energy Stocks for 2010: Q2 Update; The dismal performance of renewable energy stocks so far this year is likely to lead to great buying opportunities in the rest of the year.
Tom Konrad, July 12, 2010 (Renewable Energy World)

"In the six months since I published my annual clean energy mini-portfolio, it has far outperformed my industry benchmark, the Powershares Wilderhill Clean Energy Index (PBW). 2010 is the third year in a row that I've published a list of ten renewable and energy efficiency stocks that I expect to perform well…These stocks are intended for small investors wanting to put some money in the sector, but not satisfied with the performance or holdings of clean energy mutual funds or clean energy exchange traded funds (ETFs)…

"…[There are] two versions of the my Ten Clean Energy Stocks for 2010 mini-portfolio…[In the diagram’s outer ring is a] portfolio of ten stocks, including three energy efficiency stocks, three electric grid stocks, three alternative transportation stocks, and one biomass/waste to energy stock. The inner ring denotes a simplified portfolio, which substitutes the Smart Grid Infrastructure Index Fund (GRID) for the three electric grid stocks and the Powershares Global Progressive Transport ETF (PTRP) for the three alternative transportation stocks…"

chart from Konrad - click to enlarge

"Since December 27th…the Powershares Wilderhill Clean Energy Index (PBW) has fallen 21.7%… trailing the broad market by less than 2%, while outperforming the industry benchmark by almost 16%…the ten stocks for 2010 [are -5.21%]…the four stocks plus two ETFs for 2010 [are -5.34%]…

"…[M]ost investors would have probably been happier if they had simply stayed out of the market, or hedged their market exposure so far this year, which is exactly what I've been urging readers to do…I saw some brief buying opportunities in clean energy at the end of May (I picked up a little Exide (XIDE) at $3.85 and US Geothermal (HTM) at $0.70) …[but] those opportunities were short-lived, and probably do not represent the market bottom for clean energy."

chart from Konrad - click to enlarge

"If the year continues to progress as I expect, the broad market will continue to decline, as will the clean energy sector…Buying opportunities in clean energy are likely to lead buying opportunities in the market as a whole, because the rapid decline of the whole clean energy sector over the last year is already producing great valuations…I personally am still maintaining an overall short position in the market, but expect to be buying clean energy stocks with a focus on profitable micro-cap companies opportunistically.

"Since these ten stocks have held up better than clean energy as a whole, we're liable to find fewer than average great buying opportunities… C&D Technologies (CHP), currently trading at $0.95 is the best value I see…Portec Rail Products (PRPX)…is the subject of a takeover bid from LB Foster (FSTR) [and could be a short-term gain opportunity]…At some point, I hope to be able to say it's time to buy this portfolio as a whole, but I think that time is not yet…Now is still a time to remain mostly in cash, while keeping an eye out for individual buying opportunities…"