Munich-based but worldwide, Allianz Global Investors is a very large asset manager, and as such has a vested interest in knowing the mindset of investors. Late last week, the German giant released a summary of a survey it commissioned from GfK Roper, who interviewed 1200+ people on a variety of subjects. To get the suspense out of the way, optimism was markedly present, with more than half (52%) of the respondents saying that the Dow Jones Industrial Average would be higher a year from now than it is today. “Higher” is a direction, not a level, of course, but it is the outlook that is important. http://mediarelations.allianzgi.com/en/Pressreleases.
The survey elicited responses about some fairly specific items as well. Key findings included that 78% of investors expect to see more pro-environment business policies under the Obama administation. In general, the summary of the reaction said that “Despite the sluggish economy, investors are generally optimistic and ready to put their green to work.”
So in spite of the market opening down 100 this morning, we ought to have smiles on our faces. If the survey proves right, what kinds of companies ought we to look for with our investable dollars? (The survey says that 48% of investors are likely to invest in environmental companies this year)
There are a very broad number of companies and types of investments in solar energy, which is probably the broadest category in terms of the availability of choices. These include big companies like Tempe, AZ-based First Solar (Nasdaq:FSLR, $11.5 billion market cap, http://www.firstsolar.com/). But it also includes smaller, more speculative companies like Roseville, CA-based Solar Power Inc (EBB:SOPW, $23 million market cap, stock at $0.69, down from a 52-week high of $2.85, http://www.solarpowerinc.net/). It also includes the formerly fuel-cell-fixated Rochester Hills, MI-based Energy Conversion Devices Inc (Nasdaq:ENER, market cap of about $1 billion, stock at $23.99, down from $83.33, http://www.ovonic.com/).
Small companies like the Israeli 3G Solar Ltd can also be interesting. They have announced their intention to list on the Toronto Venture Exchange (which claims to have more oil & gas companies than any other exchange in the world, by the way). Their dye-based solar technology offers variety in a portfolio that is likely to be dominated by Photovoltaics, thin-film technologies and solar concentrators of various kinds. There is no current date, as far as we know, for the listing in Toronto, but you might want to keep an eye on http://www.3gsolar.com/.
We have always been fond of cross-border companies, which frequently offer better values in terms of ratios. If your taste runs in that direction, have a look at Seville, Spain-based Abengoa (3.2 billion euros revenue for 2007, the latest reported year). It is more complicated to invest in Abengoa; its shares are theoretically available on the Pink Sheets in the US under the ticker ABGOY, but they seldom trade. Trading is fairly brisk on the Madrid Exchange, with a current price of 11.80 euros, down from a high of 13.29 euros) http://www.abengoa.com/sites/abengoa/en/gobierno_corporativo/acciones/cotizacion_de_la_accion/index.html
Why Abengoa? They are building what is claimed to be the largest solar installation anywhere in the world — and it is in Arizona. The Solana plant is being built near Gila Bend for Arizona Public Service (electric utility), http://www.aps.com/ to generate 280 MW of output power using solar concentrators that melt salt and use the heat generated to drive turbines to supply clean energy to 70,000 homes.
But you may also find that South Melbourne, Australia-based EnviroMission is to your taste: http://www.enviromission.com.au/IRM/content/home.html. It trades on the ASX, but also trades lazily on the Pink Sheets as OTC: EVOMY ($0.78, very low volume). EnviroMission looks to build the first Solar Tower power generator in the world — in the US, by the way. The Solar Tower could be 1000 meters tall, using a chimney theory to loft heat from solar concentrators to drive turbines. That would be, as we calculate it, taller than a 300-story building. Pretty interesting.