Alternative energy stocks represent an investment in alternative energy sources. The alternative sources of energy are defined in the web page, and the companies involved are discussed. The major alternative energy sources include ethanol, biodiesel, LNG, GTL, solar energy, wind power, fuel cells, hybrid cars, geothermal energy, oil sands, and nuclear energy. The stocks of companies involved in energy efficiency improvements are also discussed. A few of the scams in the field are covered.
Alternative energy stocks should be considered for every energy stock portfolio, however, caution is advised. If you have a speculative personality, this is the area for you. Persons investing in the "pure" alternative energy areas, e.g., ethanol fuels, solar energy, etc., early-on made a killing in some stocks. But, if you jump into these areas now, you may be the ones killed as the early birds unload their stocks. Rather than the pure alternative energy stocks, A better buy may be in those blue chip stocks that have only put part of their capital to work in alternative energy.
The performance of these stocks during the past 2 years has been a disaster. The overall stock market crash is largely responsible for the poor performance. But a major contributing factor was the sudden drop in oil and natural gas prices when the recession began . I believe this drop in oil and natural gas prices was temporary because most of the fundamentals for higher energy prices remain in place for the long run.
Alternative energy company stock prices will eventually recover, however, conventional energy company stock prices will have to lead the way.
I am conservative in my financial dealings and I have a slightly different approach in this area than most of the literature. I define alternative energy sources as alternatives to the conventional oil, coal, & natural gas products now in general use . Those three energy sources are non-renewable, that is, when they are gone....they are gone.
To replace the above conventional non-renewable energy sources with renewable energy sources, e.g., solar energy, wind energy, wave energy, geothermal energy, biodiesel, ethanol, etc, we will need "interim" energy sources to keep us going until the renewable energy sources can be developed. The interim energy sources are as necessary in my mind as are the exotic renewable energy sources.
So, the definition of alternative energy sources used herein are the renewable energy sources discussed herein and, additionally, the interim (or bridge) energy sources.
This definition may be a little screwy but it keeps us from concentrating entirely on the pristine renewable energy sources that may take decades to get going. The conventional energy sources are being depleted fast and we can't shut down civilization while the renewable energy items are under development.
To me, LNG (liquefied natural gas) is an interim alternative energy source even though, it is really only natural gas in the frozen state. But emphasis is needed on LNG because, if an LNG infrastructure can be developed in the U.S., we will have an ample supply of natural gas for at least the near to medium-term future. Large deposits of natural gas (often stranded deposits) exist throughout the world and will be ideal for use as LNG.
I also define the diesel fuel products that can be produced from the more-available natural gas as alternative energy sources since such diesel products are alternatives to the present diesel fuels produced from crude oil which is in increasingly short supply. The new diesel is largely pollution-free as opposed to the conventional diesel that contains substantial amounts of contaminants. Much of the world is converting vehicle fuel use from gasoline to diesel (better gas mileage) and the potential for such gas-to-liquid (GTL) diesels is unlimited. The afore-mentioned stranded natural gas would be an ideal source for the GTL processes.
Oil produced from oil sands and tar sands is also considered an alternative energy form for the purpose of this web page. Production of oil from these sources is rapidly increasing and the oil and tar sands are a valuable interim energy source.
Uranium is included as an alternative energy for the purpose of this web page. I am convinced that, as oil and gas is depleted, we will have no choice but to turn to heavier use of nuclear energy for generating electricity. The price of Uranium is already reflecting a greatly increased demand (prices up about 1000 % in just a few years). I expect the Uranium price to eventually come down as market supply and demand kicks in. Uranium is much too plentiful in nature to justify the present high prices. But it will take time.
To summarize, I use my own definition of alternative energy because, if we concentrate on pristine "alternative sources" such as solar energy, windmills, etc. to solve our energy crisis, we are going to soon be in a heap of trouble. We need to quickly develop what is actually there and workable and then worry about the long range stuff.
So with my "definition" caveat in mind, let us proceed.
I was shocked to see on TV a respected media spokesman discussing the use of the "little green pills" to improve gas mileage. You just put one or more of the expensive pills in your gas tank and your gas mileage is supposed to soar. What really shocked me was that no one was laughing at the time.
The above is probably the worst scam out there in the alternative energy area. The kit for converting used cooking oil from fast food restaurants into a fuel for your car is not really that much of a scam since the oil is combustible and can be made to burn in your car; but the idea may be impractical largely because of the odor of the cooking oil combustion. The odor will probably prevent this "alternative fuel" from getting too popular.
The present heavy use of ethanol is a mixed blessing although I am always a little suspicious when I see huge government subsidies and mandatory regulations necessary for a fuel to compete with ordinary gasoline. The farm states that grow corn love ethanol. On the less cynical side of the coin, it must be noted that Brazil has apparently actually been successful, without huge subsidies, in using ethanol to substitute for gasoline, so maybe it is a more viable fuel alternative than I think. Time will tell.
Another major problem with the ethanol producers in the immediate future is the price of corn from which most ethanol is produced in the U.S.. The price is getting close to $7 per bushel. Breakeven point for most ethanol producers is a corn price of about $5.00, so a significant additional rise in corn prices would certainly adversely affect the stocks of the ethanol producing companies...even with the government subsidies.
Put my cynicism about ethanol aside when considering this company. ADM is the largest producer of ethanol for fuel and they make a great effort to maintain quality, etc in the ethanol business. Also, ethanol is just one of many products produced by this world leader in agricultural chemical products. So, an investor does not have all his eggs in the ethanol basket with this huge company.
The market cap is $20.2 Billion. Revenue = $63 Billion. Net income = $1.2 Billion. Obviously, ADM is not that small of a company.
ADM stock is up about one-third over the past year.
ADM is still king of the ethanol producers.
A much smaller and newer company than ADM. It was a highly touted alternative energy stock a year or so ago but, in the past year or so, oil price variations have cooled the stocks of ethanol producers such as PEIX. Market cap is $23 million and revenue is $502 million
Pacific Ethanol has lost over 50% of its value over the past year.
I am extremely cautious about putting new investments into the ethanol stocks.
First Solar is an aggressive solar company which designs, manufactures, and sells solar electric power modules using a thin-film semiconductor process.
First Solar is fast growing company in the solar energy segment. The company is profitable.
First Solar has a market cap of $10.3 billion and revenues of $1.9 billion. Income was $631 million over the past year.
First Solar has many detractors who keep saying the company is getting ready to collapse. Instead, the stock has held up fairly well for this volatile stock group having dropped in value by about one-half in the past year..
First Solar is worth keeping an eye on!
Before you get too excited about this "green" company, please be informed the company came out of bankruptcy a couple of years ago.
Market cap is $4.8 billion, revenue is $10 billion. The company is now operating at a loss but expects to return to profitability soon. The stock is up over one-half over the past year.
The investor should be careful with such a stock! Do your own research!
Many, many questions on the stock but a considerable amount of information is available on the Internet about the company. Maybe you can find the answers there.
In my opinion, LNG companies have a bright future as an alternative energy source. I just don't know which of the LNG firms will win out. Some of the active LNG firms are:
A small independent oil and gas company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area.
When I reviewed this stock a year ago, the most exciting thing about the company was its involvement in the development of the Main Pass Energy HubTM (MPEHTM ). The MPEHTM is an offshore terminal being constructed around the huge abandoned Main Pass Block 299 offshore Sulphur mine and facility off the Louisiana coast. The MPEHTM will receive LNG, re-gasify the LNG, store the natural gas in the salt dome at Main Pass, and distribute the natural gas to markets via pipelines.
Since that time, the recession and the discovery of numerous natural gas-bearing shale formations around the U.S. has created a surplus of natural gas and the price of natural gas has plummeted. I have not researched how this will affect the Main Pass project. One question I have is could the Main Pass terminal be used to export natural gas to gas-deficient countries like Japan? It appears to me that LNG imports to the U.S. will be limited for years to come. Exporting LNG may become more profitable than importing it.
The revenues for McMoRan are $420 billion. Market cap = $601 million. The company is presently operating at a loss but is expected to be profitable within a year or so. MMR stock was down slightly over the past year.
It should be noted that analysts have a fairly favorable opinion of the stock so the more conventional oil & gas ventures that the company is engaged in are apparently doing well. (Note: MMR controls about 1.5 million acres of oil & gas leases in the Gulf of Mexico.)
MMR is also heavily involved in the potentially rich Blackbeard Prospect in the Gulf of Mexico. The exploratory well on this project has been drilled to over 30,000 feet. (Most of this was drilled by EXXON who abandoned the project due to high pressures.)
(Note: I worked for many years for the now-defunct parent of this company back when the parent company was mining sulphur.)
This small independent firm also is engaged in oil and gas exploration in the Gulf Coast area. As with McMoRan, the exciting thing about the firm was its heavy involvement in the development of a liquefied natural gas (LNG) receiving business along the Gulf Coast. I don't have information as to how the present oversupply of natural gas in the U.S. will affect their LNG activies.
Market cap = $109 million and revenue is about $96 million
A fully integrated gas and electric company headquartered in Richmond, Virginia. Dominion generates and distributes electric power, but more important to this web site, it explores for oil and gas and delivers the oil and gas. Even more important to this web site, is that Dominion is heavily involved in LNG and actually operates one of the handful of LNG terminals presently operating in the U.S.
Dominion's revenues are $16 billion and net profit was $1.8 billion. Market cap = $22 billion.
Gas-to-Liquids (GTL). GTL processes utilize natural gas to produce a "diesel-type" liquid fuel that is relatively pollution free. Handling the GTL is much easier than handling LNG in that it is non-explosive and easier to transport (does not require cooling facilities or special terminals).
Both LNG and GTL have bright futures. Russia, Iran, and Qatar , the three countries with the largest natural gas reserves, also have bright futures in this area. Bolivia, with natural gas reserves second only to Venezuela in Latin America, would appear to be in good position, however, both Venezuela and Bolivia have been scrapping with the US so fiercely that the verbal conflicts might develop into a problem.
I was not familiar with Sasol before I prepared this web page so it was a shock to see such large, diversified, highly technical company operating out of South Africa. With advanced companies like Sasol working in the oil & gas industry, maybe we can hold off Peak Oil for awhile.
Sasol has well-developed GTL (Gas to Liquid) capabilities. In addition to producing liquid fuel from natural gas, Sasol also produces liquid fuel from coal. They also produce many other chemicals and are also involved in oil & gas exploration and production. They are involved in the large offshore Gabon fields.
With the recent discovery of the massive amounts of natural gas in shale deposits in the U.S., why not use Sasol's technology to convert the surplus natural gas in the U.S. to a liquid fuel (diesel, I believe, is the fuel produced by the Sasol technology)? It would certainly help with the energy crisis that will be upon us in the future.
Sasol's annual revenue is about $24 Billion and net profit is about $1.9 billion. Market cap is about $19 billion.
Sasol is highly rated by the analysts and may be a good investment for the long run. The stock is up about 80% over the past year so it may now be a bargain.
An alternative energy company to keep an eye on!
This California-based company has been called a pure play on the use of natural gas (compressed and LNG) to drive vehicles. As far as profitability goes, this new company is still dripping red ink but revenues are increasing. Boone Pickens is the largest investor in the company - a good sign sign since no one knows the oil/gas business like Pickens.
Clean Energy Fuels has numerous natural gas fueling stations operating at this time and these stations service thousands of vehicles, e.g., public transit vehicles, etc.
Vehicles operating on compressed natural gas are more popular in the western states but their use will spread.
Clean Energy Fuels has a market cap of $749 million and revenues of $124 million. As inferred above, the company is operating at a loss but is forecast to become profitable in a year or so. The stock tripled over the past year.
An interesting alternative energy play! It appears that compressed natural gas and LNG have more of a future in fueling vehicles than many of us anticipated. And you get Boone Pickens as a bonus!
It is unusual to classify a firm as large as Toyota as an alternative energy company. However, Toyota's Prius brand of automobiles has dominated the hybrid car segment. Early on, Toyota jumped out front and cleverly established Prius as the hybrid car. Other firm's hybrid models - often as good or better than the Prius - have taken a back seat. Notably, the hybrids of the U.S. big three auto companies have been in that back seat. As of now, Toyota seems poised to continue to lead the pack.
Toyota has a market cap of $121 billion and revenues of $188 billion. Over the past year, Toyota stock was up about one-third.
Toyota concentrates its business on passenger cars and other vehicles including pick-ups. It has world-wide production and marketing facilities.
This is a Florida electric utility which generates electricity using natural gas, nuclear energy, and wind energy. Of interest to this alternative energy site is the use by FPL of wind energy as a major source of electrical power generation.
FPL is a large company with a market cap of $21billion. Revenue is $16 billion per year and net income is $1.7 billion. FPL stock price was up slightly over the past year.
Many environmental folks will be watching the utility to see how the wind energy projects go.
(Note: Three other well-recognized firms involved in the wind energy area are: Iberdrola, (IBDRY.PK), a large, aggressive Spanish firm ; Headwaters, (HW), a firm with some new alternative energy technology; and, small but higly-recommended GCTAF.PK. These are foreign firms so information is limited but I was very interested in the large firm, Iberdrola. The company looks like they would like to take over the wind energy business. Additionally, they are big in other utility and engineering enterprises. Maybe you can find enough information on them to make a decision.)
For those of you who are not interested in investing in the smaller companies listed above, GE may be of interest to you. GE is jumping into alternative energy in a big way. (Of course, GE is involved in many sectors in a big way!)
Some of the environmentally-friendly products that GE is involved in include LEDs, CFLs, efficient gas turbines, wind turbines, biogas engines, solar energy, etc., etc. Yes, GE is jumping into alternative energy in a big way and they have the proven technology to be the leader in the alternative energy field.
GE, with a market cap of $167 billion, annual revenue of $161 billion and net income of $11.8 billion, is the bluest of blue chip stocks! The stock was essentially unchanged over the past year!
At one time, GE was spoken of as the company that could do no wrong. Will they recover their old status.
Another blue chip. Johnson Controls is mentioned prominently in the alternative energy literature due to the company segment dedicated to "efficient buildings." The providing of energy-efficient buildings and homes is regarded as many alternative energy experts as the number one way to fight the energy crisis (Peak Oil). But Johnson is also in the battery business - lead acid batteries for vehicles and lithium-ion batteries for plug-in hybrids (joint venture with the French company, Saft). Johnson, of course is well known for its instrument products and systems for vehicles.
Johnson has a market cap of $18.3 billion and annual revenues of $48 billion. Johnson stock almost doubled over the past year.
Still another smaller blue chip. This company stock more than tripled over the past year.
Tto get down to brass tacks about the company. It makes transmission cables of all types and sizes and transmission cables are going to be a huge business as alternative energy sources start coming on line and as efficiency requirements tighten along the electrical grids.
The market cap is $1.7 billion, revenue is $ 4.6 billion, and net income is $156 million.
1. Alternative Energy Sources. LNG, oil sands, solar energy, wind energy, hybrid cars, etc. are all discussed. We need good alternative energy sources!
2. Alternative Energy Sources - Solar - Ethanol - Biodiesel - Wind. Focuses on the renewable alternative energy sources - solar energy, ethanol, biodiesel, wind energy.
3. Oil & Energy Crisis. Peak Oil is just around the corner and an energy crisis is already developing. What will happen when Peak Oil actually arrives?
4. Oil & Energy Company Stocks. With an energy crisis developing, oil and other energy company stocks - both alternative energy company stocks and conventional oil company stocks - should be good buys.
5. Bakken Oil Companies The Bakken Shale Formation is one of the biggest oil plays in the world. It will give us a little time to develop Alternative Energy
Alternative energy stocks can be a good investment as the present energy crisis develops although, in the past year, they have been a disaster. The alternative energy companies include those companies involved in oil sands, solar energy, LNG, GTL, wind power, geothermal energy, ethanol, biodiesel, and hybrid cars as well as those energy companies involved in energy efficiency systems and devices. The era of alternative energy has begun!
Last Updated: 08/05/10
e-mail me @ vanc13@cox.net
Disclaimer
This web site, titled Stocks And Investments - Alternative Energy Stocks and the information included herein, is intended to provide information only and should not be construed as investment advice. The information provided is meant to broaden your knowledge and enable you to make better investment decisions within your portfolio.
I am not registered as an Investment Advisor nor am I a certified financial advisor. Sometimes I give an opinion on the quality of an investment. This information is based solely on my own investment goals and investment needs and might not reflect your goals and needs and might not be an appropriate investment for your portfolio.
Please consult with your financial manager/consultant/accountant before actually purchasing any of the investments discussed herein.