Top Alternative Energy Investments
High Oil Prices Create Opportunity in Wind, Solar, and Nuclear Power
Jun 30, 2008
Though the high price of oil has created a tremendous amount of pain at the gas pump, there has been one benefit of sky-rocketing crude - it's confirmed the need for alternative energy technologies. On the other hand, the energy crisis has also exposed how ill-prepared to supply alternative energy the nation and the world are.
There are a few alternative energy companies that have found themselves in the right place at the right time, able to meet the growing need for alternative energy. The ones that are publicly traded may well offer investors outstanding long-term appreciation potential.
Though far from an exhaustive list, the following stocks could provide solid rewards with minimized risk in each of their respective categories...wind, solar, geothermal, and nuclear.
Wind - Western Wind Energy Corp. (WNDEF) is North America's largest publicly-traded wind power company. Other companies dabble in wind energy, but Western Wind is wholly focused on converting wind into energy. It's a relative newcomer, but favorable legislation from the company's home state of California and legitimate development offers bode well for their future.
Solar - Despite being in development for years, solar energy has proved to be unprofitable or barely profitable for many solar power companies. Suntech Power Holdings (STP) appears to be an exception. The company's stock price is relatively lower than other solar power stocks, and the forecasted earnings growth is even more promising.
Geothermal - Ormat Technologies (ORA) may not have much competition in the geothermal energy market, but they haven't become complacent. Ormat is respectably profitable, and gaining momentum.
Nuclear - Oddly, there are no pure nuclear plays of any kind; almost all of the nation's nuclear power plants are part of a larger multi-power-source utility. However, it's worth noting one such stock may be on the way. As of mid-2008, Enexus Energy has filed paperwork with the SEC. If approved for trading, they'll become the market's first 'nuclear only' stock.
Investors interested in capitalizing on these opportunities - but unwilling to pick individual stocks - may do just as well with a basket of industry-related stocks, such as an exchange-traded fund. Van Eck's Nuclear Energy ETF (NLR) is one way to take advantage of the coming growth of nuclear power production. Claymore/MAC's Global Solar Energy ETF (TAN) is a solar power possibility. PowerShares has a wind energy ETF on the way as well. Look for more alternative energy ETFs as the need for these companies swells.
Bear in mind there are never any guarantees, so don't assume any of these stocks are infallible. Likewise, astute investors should be flexible and aware enough to take action when merited. However, some alternative energy companies will certainly thrive, rewarding investors with the foresight to own them.
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