TFN eNews 08/27/2009: Top Alternative Energy Stocks
Published via e-mail broadcast on August 27, 2009
In today’s TFN eNews:
* SpongeTech is gainer #49 for HSC members
* Undead hope in the economy
* Top Alternative Energy Stocks below $6
Dear TFN Reader,
“There is something wrong with the entire recovery tale, which ignores the fact that excess plant capacity is still at the highest level since the Great Depression,” writes the Telegraph’s Ambrose Pritchard today.
“Capacity use is 70% in Europe, 68% in the U.S., 65% in Japan, and as low as 50% in some countries, according to the World Bank’s Justin Lin. Companies will have to cut jobs and investment. Soaring ‘confidence’ indicators have decoupled from reality. The world economy is still prostrate. GDP has shrunk 4%, 6%, 8%, even 12% or more in a large group of countries. There it more or less sits, like a deflated soufflé.”
Pritchard is right. Consumer confidence indicators are notoriously wobbly. I wouldn’t put my coffee mug on them… let alone my expectations on the economic future. Because consumer confidence is expressed far more reliably by consumer spending. And, apart from small seasonal bursts, I don’t see that recovering to pre-bust level any time this decade.
In the U.S., there has been a distinct shift in spending habits. I notice it in myself. Instead of heading out to the deli for lunch every day, I’ve been brownbagging my lunches for months. At first, it was something akin to the various “Depression Gardens” springing up all over the place… a symbolic act of the Zeitgeist.
Now it’s a habit. I’m even eating the cucumbers my son grew in the back yard!
(Someone has to…)
But the new frugality is wreaking havoc with the gastronomic establishments in the ‘hood. My friend Kerrigan Kitikul, maker of the tastiest Chicken Pad Thai in the world, was bemoaning the steep loss in lunch business. (My bag lunch alone has cost him $350 in revenues so far this year… the Subway across the street’s out a cool $400… not to mention the corner restaurant where we used to eat with the entire TFN gang.)
Accordingly, Kerrigan hasn’t been able to afford his trademark grungy assistant messing up orders in over a year. Retail businesses everywhere are advertising 50%, 75%, even 90% markdowns… if they haven’t closed shop already.
It’s very simple: If consumers aren’t consuming… no consumer economy can work.
Real unemployment in the United States… including those who’ve given up looking… is 16%.
It’s like France or Germany in the 1990’s!
Only without American spending!
*** But the stock market so far reflects undying (or undead?) belief in the upside.
To tell the truth,gains are coming so hard and fast even I can’t keep track of them. Yesterday, as I was still bragging about Laura Cadden’s double-digit gainer #48, I had overlooked that Andy Snyder had just taken profits on one half of his position in a promising penny stock:
“If we don’t lock in gains today and the market turns against us, it could be a long time until we get another opportunity. Your shares of SpongeTech Delivery Systems (OTC BB:SPNG) are up by over 30% at the moment. Thanks to a strong two-day surge in anticipation of the company’s latest quarterly results, we’re sitting on hefty profits.
“With a normal stock, I would declare this a ‘buy the rumor, sell the news’ sort of situation and get out of it. But SpongeTech is far from normal. It’s a small cap with Blue Chip fundamentals. But in the short term, the volatility surrounding the earnings report could create problems.
“With that in mind, I have a simple strategy. Sell half of your SpongeTech position now. We will lock in the 30% gains and wait to repurchase those same shares on the next dip. Just in case this week’s momentum does not wane, we’ll maintain half of our position to take advantage of the upside. It is a win-win situation.”
Don’t quibble if I chalk up these 30% as double-digit gainer #49 for Hot Stock Confidential readers this year, will you?
*** It’s been a tough couple of weeks for the Smith & Wesson Holding Corporation (NASDAQ:SWHC) bulls. Shares of the gun maker soared faster than a speeding bullet when Obama hit the top of the polls last November. But even a super-sonic bullet eventually falls to the earth and skips to a stop.
TFN’s top strategist Andrew Snyder writes: “It was a gutsy move, but I recently alerted TFN Strategic Investors that all the requisite signs of an impending downturn were present. Shares were poised to plunge. With strong tailwinds pushing share price higher on June 26 I advised my readers to take a short position.
“It’s paying off. Since mid-July, shares of the company have plummeted by more than 25%. The hemorrhaging has grown to panic proportions over the last week, with several days of 5% or greater declines. So far today, shares are down by over 4%.
“With a 52-week low of $1.53, the pain will not end anytime soon. Our bold move is going to pay off in a big way.”
His speculation on China’s “Commodity Carry Trade” just provided readers with a second chance to enter. Care to join them?
*** The White House wants to rebuild the U.S. energy grid. Congress has earmarked billions of stimulus dollars to sponsor renewable energy.
But the current energy infrastructure is ill equipped to deal with new solar- and wind power-generated electricity.
Solar and wind power are ‘intermittent’ forms of energy. Sometime the sun’s out, sometime it isn’t. Sometimes it’s windy… and sometimes you wish for even a slight breeze.
Efficient usage of such alternative energy depends on your ability to store the energy that was generated… and release it as needed.
One way would be to place a large number of batteries around a neighborhood hooked up to a solar grid. In fact, the U.S. Department of Energy is plowing more than $600 million into storage technologies.
Other solutions revolve around flywheels — metal rotors spinning in a vacuum inside a steel cylinder. Power is stored as rotational energy which can be reconverted into electricity during demand spikes.
There are other ways: Water can be pumped up into elevated reservoir when demand is low, to be released through turbine generators when demand is high. Other methods include using the wind- or solar-generated energy to melt salts to store the heat… which then can used to drive turbines.
We have compiled a list of some of the best speculative energy storage technology companies that $6 or less can buy:
Power-One, Inc. (NASDAQ:PWER)
Current Share Price: $1.31
Our Upside: $2.50 by March 2010
Power-One, Inc. designs and manufactures power conversion and management products, including inverters for roof-top solar systems, used in industrial applications and high-end consumer markets.
http://www.power-one.com
Ballard Power Systems, Inc. (NASDAQ:BLDP)
Share Price: $1.73
Our Upside: $2.50 by March 2010
If you’ve been around the energy investing block for a while, you no doubt will be familiar with the rags-to-riches-to-rags story of Ballard Power Systems,. The company develops, manufactures, sells and services proton exchange fuel cells for the automotive and industrial back-up power markets. BLDP just announced revenues of $13.1 million and net income of $0.01 per share for the second quarter ended June 30, 2009. Their core fuel cell products segment has grown 144% year over year, but this growth was largely offset by declines in “supporting business segments”. Profitability in Q2 was driven by a one-time accounting gain from unwinding a Japanese residential cogeneration systems joint venture. Still, a prime candidate for headlines speculation.
www.ballard.com
Valence Technology, Inc. (NASDAQ:VLNC)
Share Price: $1.55
Our Upside: $2 within 12 months
Valence Technology, Inc. is another of those stocks frequently pushed by financial newsletters as a possible moon shoot. The company develops, manufactures and markets “efficient energy storage systems” — including automotive and industrial batteries. Its upside lies in on-site back-up batteries for renewable energy power stations. VLNC just announced that for Q2 2010, it expects revenues of $3-$4 million.
http://www.valence.com
C&D Technologies, Inc. (NYSE:CHP)
Share Price: $2.13
Our Upside: $2.50
C&D Technologies, Inc. manufactures, markets, and distributes electrical power storage and back-up systems to large communications providers as well as electric utility service providers.
http://www.cdtechno.com
FuelCell Energy, Inc. (NASDAQ:FCEL)
Share Price: $3.70
Our Upside: $4
FuelCell Energy, Inc. develops and manufactures fuel cell generators for alternative electricity generation. Sure that doesn’t entail batteries, but they also produce integrated fuel cell back-up systems for plants that generate electricity using natural gas.
http://www.fuelcellenergy.com
Exide Technologies (NASDAQ:XIDE)
Share Price: $7.27
Our Upside: $10 by Summer 2010
Oops. This one has quickly moved above our $6 cut-off price. But I’ll include it anyway: Exide Technologies, through its Industrial Energy division, manufactures, markets, distributes and recycles industrial batteries that provide network support to electricity generating utilities, providing emergency or backup power and energy transfer operations. Also, Exide was awarded on July 30 2009 a $34 million grant for the development of more efficient hybrid vehicle batteries.
www.exide.com
China Ritar Power Corp. (NASDAQ:CRTP)
Share Price: $5.65
Our Upside: $7
China Ritar Power Corp. is not exactly a “green” stock pick. But when it comes to low-priced battery stocks, this maker of lead-acid batteries is a solid growth play rather than a green speculation. CRTP produces batteries for a variety of applications, including light electric vehicles and alternative energy production sites.
http://www.ritarpower.com
We think that these stock picks have excellent speculative potential. You may remember our last free report, The Top Swine Flu Vaccine Stocks under $20.
The three recommendations we passed on to you were up 30%, 16.05% and 3.64% in less than one week.
But I have a confession to make. I saved my favorite stock pick for readers of our premium service, Hot Stock Confidential.
This Top Alternative Energy Pick provides products for the military, law enforcement, and security markets. Its battery and power systems division just bagged over $1.5 million in new orders for lithium-ion batteries and components. Its stock trades for just $1.67. I think this one could rack up gains of 50 cents to 75 cents per share over the next three months!
But, while we love to provide you with free stock research, we have a fiduciary obligations to members.
The stocks we select for our HSC readers often are cheaper.. and often trade at smaller volumes. They’re a bit more volatile, too.
But you know what that means: These stocks could easily soar 20-50% in a day… or more… on any bit of positive news!
For an example, look no further than yesterday, when HSC members saw their position in Seattle Genetics Inc. (NASDAQ:SGEN) clock in at $12.50. It generated quick gains of 23%.
Or the 30% we took on SpongTech yesterday. Or the 46% one of our Swine Flu picks is up just today!
These are the kind of gains you can take straight to the bank!
And our HSC Members do. Just recently, we received this message from one of them:
*** “Thanks for TPI. I took my profit at 20% gain which paid my credit card bill this month. Thanks Laura! Looking for a dip to get back in.” HSC Member S.M., 08/14/2009
Or how about this one?
*** “You guys rock. I’ve made $115k in stocks so far this year on your picks and this off a measly military pay… ” HSC Member S.Z., 07/31/2009
Or this:
*** “I have only been a member for a couple of weeks now but you need to know, I am thoroughly impressed! I’ve been tracking the performance of your ‘picks’ before I make the leap of faith to buy and I am confident with your research and track record. I also love the fact that you are on top of the market and let us know when it is time to consider selling. You are exactly what I have been looking for.” HSC Member V.W., 08/25/2009
Of course, there’s a bit more risk involved… and a little more commitment on our side: We’re ready to blast out a sell alert at any time of the trading day, so you can lock in the maximum gain on any given HSC pick.
So far this year, we’ve taken double-digit profits on an amazing 49 recommendations!
We’ve made it easy as pie for you to become a Hot Stock Confidential member.
So for our Top Alternative Energy Pick, simply follow this link…
You’ll have your hands on our recommendation within minutes!
Quote of the Day:
“After many students go through a dozen years in the public schools, at a total cost of $100,000 or more per student — and emerge semi-literate and with little understanding of the society in which they live, much less the larger world and its history — most discussions of what is wrong leave out the fact that many such students may have chosen to use school as a place to fool around, act up, organize gangs or even peddle drugs.”
– Thomas Sowell, Creators.com
*** It’s almost getting monotonous: Double-digit gainer #49 for HSC Members this year.
Recommended Reading:
Kewaunee Scientific: A Small-Cap Blue Chip
The Top Swine Flu Vaccine Stocks under $20
The 3 Best Chinese Stocks Under $5!
Today’s Top 3 Financial News Stories:
Breitbart.com – Real US unemployment rate at 16 pct: Fed official “‘If one considers the people who would like a job but have stopped looking — so-called discouraged workers — and those who are working fewer hours than they want, the unemployment rate would move from the official 9.4 percent to 16 percent,’ said Atlanta Fed chief Dennis Lockhart.”
IBDeditorials.com — Vive Le French Care? “The French Parliament raises this levy, which applies to all forms of income, every year. Altogether, Sorman writes, ‘25% of French national income goes toward what’s called Social Security, which includes health care and basic retirement pensions for all.’ Drugs developed in America at enormous expense do cost less in France, which decides what drugs are to be used and at what prices. American patients in effect subsidize the French, who take the same pills at half the price because American pharmaceutical companies don’t want to lose the French market.”
Bloomberg.com – Dollar May Surpass ‘Established Lows,’ Goldman Says “All this suggests that the underlying dollar trend is still downward sloping and the risk is that normalization in positioning pushes the dollar through the established lows.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
Next Article: David versus Goliath: Oshkosh wins yet another big contract
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