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Green Investing Soars
April 28, 2008
While the real estate market continues to tumble, the dollar falls and the stock exchanges look more and more like bears, there is one very resilient investment segment - and its not oil or gold. It's green.
Perhaps, the most significant underlying fact is the shift in public awareness. Even retailers not known as "green" per se, are seeing their customers go green.
Walmart (NYSE: WMT) customers have increased purchases of the five eco-friendly products tracked in its Live Better Index by 66% from last year, for instance. Most of the change has occurred in the past year. April 2008 stats showed a 37% shift to organic milk and a 47% move to compact fluorescent light bulbs since April 2007.
The Index was designed as a nationwide indicator and measures "adoption" in categories where consumers have a clear choice between less expensive traditional brands and the new eco-friendly brands side by side on the shelf, which may save on health or energy costs in the long run.
The measurable shift in consumer attitudes is a fair basis for a bull-trend in eco-investing. It comes at a time when profit-taking combined with fear-based investment exits may be setting the stage for excess liquidity seeking a new home.
Case in point. The WilderHill New Energy Global Innovation Index is comprised of companies worldwide whose innovative technologies and services focus on generation and use of cleaner energy, conservation and efficiency, and advancing renewable energy generally. The New Energy Index (NEX) has risen 85.8% since January 1st, 2006. That's almost 30% better performance than the Dow Jones Industrial Averages for the same period.
Not all "green" investment funds have either the same philosophy or returns. Green Century, which services two funds - GCBLX and GCEQX - is showing overall slightly weaker performance than the Dow, for instance.
However, WilderHill's spectacular index performance is paralleled to some extent in a variety of green categories. Among "clean energy stocks" Ormat Technologies (NYSE: ORA) has enjoyed in excess of 40% increase in two years, compared to DJIA's 17%.
Bringing up the average are companies like Worldwater & Solar, (OTC BB WWAT.OB), which is up over 150% beyond the Dow since April 2006, and American Superconductor (NASDAQ: AMSC), also showing relative increases more than four times greater than DJIAs.
Enter at your own risk. Showing significant losses over the same 2 year span are IDA Corp (NYSE: IDA), MagnaTec, (NYSE: MAG), ECD Ovonics (NYSE: ENER), Beacon Power (NASDAQ: BCON), Distributed Energy Systems, (NASDAQ: DESC), Capstone Micro Turbine (NASDAQ: CPST), Altrair Nano (NASDAQ: ALTI), and Ecotality (OTC BB: ETLY) and many others.
Neither stellar nor poor historical performance is a necessary indication of future results. Country singer Willie Nelson recently endorsed WatAire International in a performance in the Florida Everlgades. WatAire produces water from air.
Forward thinking investors should also consider that with a new and obviously very huge market ahead, many potentially very lucrative clean energy and nanotech innovative entrepreurs are raising capital at this time. Qualified investors may wish to consider dialog for early, second stage or development stage investing with such companies as GEMZ Corp. or Uniglobe.
Leading middle-market companies seeking capital can also turn to dedicated eco-investment firms specializing in private equity investments, such as New York based Environmental Capital.
Jeff Overbeck, Freelance Reporter