Monday, November 1, 2010

The current state of the "green" stock market

Solar, wind and wave power are the future of energy

The upcoming elections, recent earnings reports, continued economic unrest and Prop23 in California have not been kind to my “green” stock portfolio. The past two weeks have seen pullbacks in several sectors even though the DOW and NASDAQ continue to see very slight gains on most days. I do not see a Republican majority in congress and/or the Senate doing “green” share prices much good but am not yet convinced that will happen.

Solar shares have taken a big hit across the board. A few seemed to be shaking it off and recovering last week but have since stalled again. I am predicting at least three to four weeks to start approaching the October 15 levels again. A Republican majority and passage of Prop 23 could make that a much longer road.

Mining stocks, and rare earth/lithium miners in particular, are also down and consolidating. These stocks should bounce back quickly as Chinese export concerns remain high along with high demand. If the overall market starts to falter, silver and gold miners should benefit most.

Water treatment and infrastructure shares barely stumbled and are already nearly recovered. The major players, such as Calgon Carbon(CCC), Veolia Environment(VE), Consolidated Water(CWCO) and Watts Water Technologies(WTS) should do well. Consolidated has had a bad year but seems to have turned around. Calgon and Watts are performing strongly.

Battery technology companies remain steady performers and could start to surge at any time. Demand will grow with increasing market penetration by electric vehicles and commercial solar/wind power installations. New research breakthroughs could put a company into leadership position quickly.

Most of the maritime shipping companies, particularly those based in Greece, saw a slight pullback last week. Continuing weakness of orders, rising fuel costs and Greek economic uncertainty remain issues for these stocks. Nevertheless, goods still need to be moved, international trade continues and I remain bullish on maritime shipping as the cheapest way of getting large amounts of product from here to there.

Wind power company shares are mostly flat. Even with increased demand, especially overseas, this is not likely to change anytime soon. Wind is just not glamorous enough for most investors and does not have as much perceived potential for use on individual homes or commercial buildings.

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