Investing: striking gold in green tech stocks.
POLLS SHOW THAT MORE AMERICANS NOW BELIEVE CARBON emissions are partly responsible for global climate changes and that something must be done soon. With more companies rushing to develop green technologies, Success asked Matthew Patsky, co-manager of the Winslow Green Growth Fund,* about potential investment opportunities:[ILLUSTRATION OMITTED]
WHY IS GREEN SO HOT? The entire issue has undergone a transformation and become mainstream. First, we're seeing greater public demand for greener solutions. Second, traditional energy is becoming more expensive. Third, to meet demand, comply with regulations, and remain efficient, companies have no choice but to invest in green technologies.
IS THERE MOMENTUM? Absolutely. Keep in mind the U.S. is a bit behind the rest of the world when it comes to recognizing the need for sustainable technology. Global investment in green energy has jumped from $27.5 billion in 2004 to $49.6 billion in 2005 and $70.9 billion in 2006. By 2016, this figure is expected to hit $226.5 billion.
WHERE DO YOU SEE GROWTH? We see investment opportunities in three main sectors: renewable energy, such as solar, wind, geothermal, and other clean sources of energy; energy conservation, including cleaner ways to produce, distribute, and store energy; and clean energy fuels and green transportation, including technologies that allow for cleaner use of fossil fuels and waste conversion.
WHAT'S THE SMALL-COMPANY PLAY? We are seeing much more activity among smaller companies that make technologies for larger companies. We're also seeing larger companies like General Electric buy up smaller companies with promising green technologies. We expect both trends to continue.
ARE THERE RISKS? Investing in green tech companies comes with some uncertainty. Stock or fund investment in green technology should represent only a fractional percentage of your total portfolio.
WHICH STOCKS DO YOU LIKE NOW? We like small-cap growth companies with technologies that will have a big impact on the environment. Among our favorites:
COVANTA ENERGY (CVA) converts garbage into energy and provides an attractive alternative to landfills.
FUEL TECH (FTEK) develops technology for coal plants that improves efficiency and reduces emissions that result in acid rain.
INTERFACE (IFSIA) produces commercial carpeting mostly from recycled carpeting materials and owns the technology and patents for this process.
METRETEK (MEK) makes technology that allows local utilities to efficiently control peak energy use, limit wasteful usage, and provide backup power to commercial users.
NOVA BIOSOUCE FUELS (NVBF) is building biodiesel plants that will turn slaughterhouse waste into fuel.
SUNPOWER (SPWR) designs, makes, and sells silicon-based high efficiency solar cells and panels for home, commercial, and remote use.
U.S. GEOTHERMAL (UGTH) owns and leases an active geothermal energy reservoir in Idaho's Raft River area.
ZOLTEK (ZOLT) produces carbon fiber for makers of wind turbine blades. Due to the strength and lightweight properties of this fiber, more makers are using it. MM
*AS OF APRIL 30, 2007, THE WINSLOW GREEN GROWTH FUND RETURNED 11.91% OVER THE PAST FIVE YEARS VS.8.91% FOR THE RUSSELL 2000 GROWTH INDEX.
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"If we are going to carry on growing and we will, because no country is going to forfeit its right to economic growth, we have to find a way of doing it sustainably." TONY BLAIR
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| Title Annotation: | Your MONEY; green technologies |
|---|---|
| Author: | Myers, Marc |
| Publication: | Success |
| Article Type: | Interview |
| Geographic Code: | 1USA |
| Date: | Jul 1, 2007 |
| Words: | 534 |
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