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Monday, October 25, 2010

Investing Recovery Act - NV Energy

The smart grid project has benefit many companies including Itron Inc. and CenterPoint Energy.  Another company that received funding for the smart grid project is the Neveda based NV Energy.  

The Department of Energy awarded a Smart Grid Investment Grant worth $137.9 million to NV Energy for a comprehensive smart grid project that will integrate various technologies including smart meters, dynamic pricing, customer communications, grid monitoring, distribution automation, distributed renewable and electric vehicles.  The project will help NV Energy manage its electric system more efficiently and enable customers to more actively manage energy use.  The funding help NV Energy to employee 15 people and eventually NV Energy estimates the project will create about 500 temporary and 45 permanent jobs.

NV Energy is listed on NYSE under the symbol NVE.  For the past 52 weeks shares of NVE were traded between the $11-$13 range and is currently trading at $12.99 per share.  With market cap of $3.05 billion, NVE is a relatively slow moving stocks.  The stock is a great defensive investment option with its low volatility and dividend yield of 3.4%.  The technical chart shows NVE is still on the uptrend and now that the price is back near the 50 day moving average we should expect the stock to go back up again.  

Friday, October 22, 2010

The Case For Verenium Corp

October 20 was a day to cheer for the investors of Verenium Corp (VRNM) as shares of the Cambridge, MA based biofuel and enzyme maker skyrocketed as high as 42% before settle back for a still pretty decent 35% in one day.  The reason drove the stock was the regulatory approval in China of Verenium Corp's novel enzyme called Purifine PLC that would be used for the edible oil industry in China.

Verenium Corp's enzyme product is a key component of an improved degumming process for refining soybean oil and vegetable oil.  Now that Verenium Corp has tapped into the Chinese edible oil industry which has been growing 5%-6% annually with domestic consumption of 24.5 million tons, we should see significant growth for the company in the future.  And high future growth is typically a key component in driving up the stock price which explains the 35% jump in stock price on October 20.   

The insider transactions were great indication that good things are coming for the company as in August Verenium Corp's officers were aggressively buying shares of the company.  If you bought the stock on August 31 following the insider purchases you would still enjoy a decent 22% gain at the moment, even after the two day straight pull back.  By the way if you are still holding and were regretting not selling the stock on that day, do no panic.  This kind of pull back is normal for a stock that ran up so high in a day.  With great future to come for the stock wait for the dust to settle down and smart buyers will eventually come back or maybe are already buying.

Tuesday, October 19, 2010

Investing Recovery Act - UQM Technologies Inc

The US government is pushing for wide EV (Electric Vehicle) deployment and as a result many companies are benefiting from the extra funding from the Recovery Act including ECOtality and Johnson Controls.  Another company that received million dollar funding from the Recovery Act is the Colorado based UQM Technologies Inc.

UQM Technologies Inc is focusing on developing the propulsion system of electric vehicle.  UQM Technologies Inc   received $45 million grant from Recovery Act through the Department of Energy's Vehicle Technologies Program and will used part of the grant for the $7.5 million facility in Longmont, Colorado and be able to produce 80 propulsion systems a day.  The rest of the funding will be used for advance research and production of electric and hybrid-electric vehicle propulsion systems.  By next year the UQM Technologies Incwould add additional 230 jobs and increase its workforce to total of 300.

UQM Technologies Incis trading on AMEX under the symbol UQM.  The stock unfortunately has not been doing well for the year and is currently trading at $2.6, far below 52 weeks high of $7.45.  The company was still losing money and was still selling shares to keep a healthy cash position.  The stock is off the 52 weeks low and is trading near 20 day moving average and 50 day moving average.  UQM Technologies Inc  is still waiting for the EV hype to boost its stock performance but don't expect too much movement till end of this year as EV begins to roll out.

Friday, October 15, 2010

Investing Recovery Act - ECOtality

The government has placed the future of America in electric vehicle by investing in projects such as Electric Vehicle Battery Manufacturing by A123.  Another company receiving funding from government is ECOtality Inc.

Based in Phoenix, Arizona, ECOtality Inc helps to bring the first electric-drive vehicles and charging stations across the nation.  ECOtality received $144 million grant from the Recovery Act and would enable 8,500 electric-drive vehicles and 14,000 electric chargers in 16 cities across United States.  The grant allows ECOtality to support 50 jobs last quarter and would hire 75 additional workers.  ECOtality estimated 750 indirect jobs will be created because of the project.

ECOtality Inc. is listed in Nasdaq under the symbol ECTY with low market cap of $45 million.  Although ECOtality is still losing money, the revenue has been growing for consecutive quarters.  The insider have been buying since June of last year generally a positive sign.  In addition technical chart shows ECTY is now on the uptrend, also a bullish sign. 

The mass roll out of the electric vehicle and charging station does not happen still end of this year and with super low volume, this is probably a good time to invest ECOtality for the long term.

Thursday, October 14, 2010

Investing Recovery Act - Johnson Controls Inc Battery Facility

Holland, Michigan grab a share of the pie from the Recovery Act as Johnson Controls Inc. won a $299 million grant from the US government to build a battery manufacturing facility in Holland, Michigan.  Johnson Controls Inc is adding additional $299 million investment to the facility which would create high tech jobs in the automotive industry.  So far the project has created or kept 100 jobs and will eventually create 500 permanent jobs upon the completion of the project.  Johnson Controls is expected to ship its first battery to Ford and Azure dynamics in September of 2010, 10 months after receiving the grant.

Johnson Controls Inc, listed on NYSE under the symbol JCI, has market cap of $21.74 billion and makes $8.5 billion in the latest quarterly report.  The stock is trading at P/E ratio of 15.88 and is currently on a bullish uptrend as 20 day moving average is above 50 day moving average.  From the technical side the stock has the potential to hit $35 in the near term.  The annual dividend of 13 cents per share or 1.61% is another icing on the cake for the potential return investor should be getting from the stock that is in the industry of the future.

Tuesday, October 12, 2010

Investing Recovery Act - DuPont Solar Energy

The Recovery Act that Seeks to boost the US economy by funding projects for businesses, large and small.  One multi-billion dollar company that receives funding from the Recovery Act is Delaware based DuPont, which received $50 million dollar from Recovery Act's Advanced Energy Manufacturing, plus $6 million in state incentives to fund a $175 million expansion of DuPont's Circleville, Ohio solar application plant.  DuPont applied for the energy tax credit in parallel with the work with the Ohio Department of Development.  At the moment DuPont employs 1,300 people across Ohio with operations at 15 sites.

DuPont has market cap of nearly $42 billion dollars with shares trading near 52 weeks high at $46.21 per share at P/E ratio of 13.48.  DuPont provide great defensive investment with dividend of 41 cents per share equivalent to annual yield of 3.55%.  DuPont is part of the Dow 30 component and  is consider a stable stock attracting different level of investors.   DuPont's expansion into solar polar should allow it to keep its leadership in the new energy era.

Saturday, October 9, 2010

Investing the Recovery Act - CenterPoint Energy Smart Meter

Deploying smart meter is crucial for the nation to manage the electrical grid more efficiently.  Itron Inc is the first company introduced in the Recovery Act Projects that benefits from the roll out of the smart meter.  Another company that received funding from smart meter is CenterPoint Energy (CNP) which is getting $200 million for the smart meter project in Houston, Texas.

The $200 million dollar project by CenterPoint Energy includes installation of 2.2 million smart meters for residential and commercial customers and installing distribution grid automation equipment and technology to allow CenterPoint Energy to operate the grid more efficiently and improve system reliability by allowing the grid to "self-heal".  In just last quarter the project allow CenterPoint Energy to support nearly 300 jobs and will eventually allow CenterPoint Energy to create 2,500 total direct and indirect jobs.

Shares of CenterPoint Energy are trading at near 52 weeks high at $16.09 per share and based on the technical trend the stock should continue to go up as both 20 day and 50 day moving average are going up.  The stock is a perfect long term defensive investment with its 19 cents or 4.85% annual dividend yield.

Monday, October 4, 2010

Construction is Back

Which sector was hit hardest during the most recent financial meltdown beside banks?  How about the home builders.  After the bubble burst of real estate that cause the worst financial disaster since the 1930s, the home builders have suffered excessive inventories, disappearance of buyers and lack of funding.  As a result many construction projects are either on hold or even went bankrupt.  However recent article from business week  shows the home builder could be back to the spotlight again, except this time in a positive way.  
From the article the home builders that survived, such as Shea Homes and Toll Brothers have been buying previously foreclosed residential projects from banks at huge discount.  Also in the article, data compiled by Bloomberg shows the 12 largest homebuilders by market value added 16631 lots to their control over the most recent quarters.  This could very well be the beginning of the bullish trend on the home builder stocks so maybe its a good time to look at some of the big builders in US.
  • DR Horton (DHI) : Texas based DR Horton is $3.5 billion in market cap and has presence in 27 states and 75 markets in United States.  The company has been making profit for the past three quarters and the most recent quarter show revenue surged $1.4 billion from $0.9 billion same quarter a year ago.
  • Pulte Group (PHM): Michigan based Pulte Gruophas market cap of $3.3 billion and has presence in 842 communities throughout United States.  The company has finally turned profitable in the latest quarter while revenue doubled from $678 million to $1.3 billion.
  • Toll Brothers (TOL): Toll Brothers paid $23 million for the golf course community that once cost $78 million.  The company is $3.1 billion in market cap and finally swing to net income after quarters of net losses.
  • Lennar Corp. (LEN): Miami based Lennar Corp. is $2.8 in market cap and has more than 80,000 home sites throughout united states.  Lennar has been generating net income in recent quarters and its insiders have also been buying shares since June of 2010.
  • KB Home (KBH): Los Angeles based KB Home is $986 million in market cap and operates throughout United States.  The company generated $50 million more in revenue in the latest quarter compared to same quarter of last year. 

Friday, October 1, 2010

Investing the Recovery Act - Battery Manufacturing Grant for A123 Systems

In this Recovery Act series lets look at a relatively new company that is focusing on technology of the future.  We are looking at project 20 on the Recovery Act Report - Battery Manufacturing and Electric Drive Component Grants for A123 Systems

The Recovery Act has awarded A123 Systems (AONE) $249 million to build battery factories in Livonia, Romulus, and Brownstown, Michigan.  The grant gives boost to the state which has been hit hard by the falling economy.  These factories aim to give United States the edge in battery manufacturing technology which is a critical link for other clean energy technologies such as electric vehicle.  

A123 Systems has already hired 90 new workers since receiving the fund in December 2009 and is expecting to add over 3,000 jobs by 2012.  In addition A123 has signed contracts with Navistar and Fishker and is working with several carmakers.  The first shipment of A123's battery is expected in September of 2010.  

Shares of A123 Systems, however, have not been doing well for the past 52 weeks.  The stock is down from $25.77 in October 2, 2010 to $8.92 at the moment.  The company is making $91 million in revenue while losing $86 million every year.  Therefore getting $249 million from the government is a big boost to A123.  With roll-out of electric vehicle nationwide coming this is a stock people should seriously consider in their portfolio for the year to come.