4 Ways to Profit from the Coming Boom in Alternative Energy
Love is a fickle thing. When oil prices surged past $100 a barrel in 2008, investors fell madly in love with alternative energy stocks. But when oil prices crashed, and when signs emerged that government budget problems would curtail the industry-friendly subsidies, so did investor ardor for this young industry. The PowerShares Wilderhill Clean Energy Exchange Traded Fund (NYSE: PBW) slid from $28 in early 2008 to below $10 today.
These ups and downs are par for the course in any young industry. Sales initially soar, then the key companies raise loads of cash to aggressively boost capacity -- often times to a point where supply exceeds demand. Prices for items -- such as solar panels and wind turbines in this case -- then plunge, leading investors to assume that profits will never be robust.
But it usually just takes time. Eventually, the industry learns to keep capacity expansion at a minimum, demand keeps rising, and prices eventually firm. And that’s just what looks to be happening in the field of alternative energy.
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hereLabels: Alternative Energy, ETF, FSLR, PBW, Solar Stocks
Solar Stocks Gapping on Pre-Market
Most Solar Stocks are gapping up today on the Pre-Market.
Except the possible start of an upswing short-term rally, with the ETF TAN up 2% on Pre-Market, and other titles such as STP and CSIQ going up almost 3%, 30 minutes before market open.
The Claymore/MAC Global Solar Index (Solar Stock ETF) Chart looks like this:
And some news, regarding the Solar Industry and Oil price correlation:
Solar Players Looking Again Like Leveraged Oil Trades (FSLR, STP, SPWRA, LDK, ENER, TAN, PBW, CSIQ)Investing in solar and alternative energy stocks comes with many risks. We have often referred to many of these companies as being essentially nothing more than very leveraged speculative oil investments because when energy prices are low most forms of alternative energy are not competitive on a cost structure. The drop of $2.62 per barrel to $66.93 in NYMEX WTI Crude is causing havoc in some of the mid-cap and speculative oils stocks. It is also hitting shares of First Solar, Inc. (NASDAQ: FSLR), Suntech Power Holdings Co. Ltd. (NYSE: STP), SunPower Corporation (NASDAQ: SPWRA), LDK Solar Co.Ltd. (NYSE: LDK), and Energy Conversion Devices, Inc. (NASDAQ: ENER). This is also seen directly in the ETFs of Claymore/MAC Global Solar Energy (NYSE: TAN) and PowerShares WilderHill Clean Energy (NYSE: PBW). Speculative stocks like Canadian Solar Inc. (NASDAQ: CSIQ) look even worse.
Labels: Canadian Solar Inc., Claymore, Crude Oil, CSIQ, FSLR, LDK, PBW, solar ETF, Solar Stocks, Solar Stocks Performance, SPWRA, STP, Suntech Power, TAN
Alt-Energy: Deja Vu All Over Again
Highlighted here are the following: PowerShares WilderHill Clean Energy (PBW), Claymore/MAC Global Solar Energy (TAN), Market Vectors Solar Energy ETF (KWT), First Trust NASDAQ Clean Edge US Liquid (QCLN) or the Market Vectors Global Alternative Energy ETF (GEX).
It's deja vu all over again. The parallels and similarities between the development and evolution of the "green," alternative, renewable energy industry closely tracks that of the now more mature technology industry of prior decades. Both industries emerged with myriad small companies -- too many to be realistically successful -- all competing for market share with widely accepted products.
Both industries rely on first-to-market technological innovations. Stocks in both industries feature high volatility with seemingly daily market moving news. High-flying valuations become value stocks, and vice versa, at any time.
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istockanalystLabels: Claymore, ETF, GEX, Global Solar Index, KWT, MAC, Market Vectors Solar Energy ETF, PBW, Powershares, QCLN, solar ETF, TAN, WilderHill Clean Energy
