In today’s current recession, considering the current world support growing for “green” initiatives, would environmental stocks out perform the rest of the market?
Just about a month ago I posted about this green financial experiment in conjunction with MarketGuru and turned to you, our community, for your input. We got some great tips and perspectives; all in all I would say that the experiment went quite well.
If you are already into online foreign exchange trading on sites like forex, or trade carbon, note that this company has done something different. I admit, I have minimal experience in investing. So I set out to pick a moderate-risk portfolio.
I diversified between various sectors. I stayed away from financial environmental stocks, because of the recession and I invested a little more in consumer goods because of the nature of “green” products.
Most of my approach comes from “The Intelligent Investor” which investor and billionaire Warren Buffett describes it as “by far the best book on investing ever written.”
The basic approach is that the investor is advised to concentrate on the real life performance of his companies and receiving dividends, rather than be too concerned with the market’s often irrational behavior.
In this light I chose companies that, from the basic research that I did, provide a valuable, environmentally friendly, service.
Basin Water, Inc. (NASDAQ:BWTR) “Basin Water offers Envirogen biological treatment systems to safely and effectively remove contaminants in groundwater and wastewater streams via fluidized bed, membrane and suspended carrier bioreactors, and to destroy VOCs and HAPs in air streams.”
Clean Harbors, Inc. (NASDAQ:CLHB) “Clean Harbors provides hazardous and non-hazardous waste recycling, treatment and disposal, as well as CleanPack® laboratory chemical packing and household hazardous waste management services.”
Capstone Turbine Corporation (NASDAQ:CPST) “The Capstone MicroTurbine™ is a compact, turbine generator that delivers electricity onsite, or close to the point where it is needed.”
Environmental Power Corporation (NASDAQ:EPG) “Dedicated to producing energy that is clean, reliable and secure. Energy that uses waste materials instead of precious resources. Energy that is cost-effective, and available today. Energy that transcends conventional notions of what is possible.”
Green Mountain Coffee Roasters, Inc. (NASDAQ:GMCR) “Our goal is to provide you with an extraordinary coffee experience that’s environmentally sound, socially just, and undeniably delicious. This is what we mean when we talk about “Brewing a Better World.””
Gushan Environmental Energy Limited (NYSE:GU) “A leading producer of biodiesel and related products in China. The company currently operates four production facilities with a combined annual production capacity of 290,000 tons…”
Headwaters Incorporated (NYSE:HW) “Whether it is improving processes that generate or consume energy or improving materials that comprise our built environment, Headwaters is committed to sustainable business practices and sustainable products.”
Johnson Controls, Inc. (NYSE:JCI) “The company provides innovative automotive interiors that help make driving more comfortable, safe and enjoyable. For buildings, it offers products and services that optimize energy use and improve comfort and security. Johnson Controls also provides batteries for automobiles and hybrid-electric vehicles, along with systems engineering and service expertise.”
LDK Solar Co., Ltd. (NYSE:LDK) “A manufacturer of multicrystalline solar wafers, which are the principal raw material used to produce solar cells. LDK sells multicrystalline wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, the company provides wafer processing services to monocrystalline and multicrystalline solar cell and module manufacturers.”
Maxwell Technologies, Inc. (NASDAQ:MXWL) “Our award-winning products and innovative, cost-effective energy storage and power delivery solutions are boosting performance and improving efficiency across multiple industries, including transportation, automotive, telecommunications, renewable energy, consumer and industrial electronics, and aerospace.”
Ormat Technologies, Inc. (NYSE:ORA) “A leading vertically integrated company dedicated to providing solutions for geothermal power, recovered energy generation (REG) and remote power.”
Quantum Fuel Systems Technologies Worldwide, Inc. (NASDAQ:QTWW) “Every day at Quantum Technologies, our team pursues a single passion: to create breakthrough technologies that redefine the future of energy.”
Rayonier Inc. (NYSE:RYN) “Rayonier is now a leading international forest products company with three core businesses: Timber, Real Estate and Performance Fibers… Rayonier strives for exemplary results and continuous improvement in everything we do, including environmental performance. We are committed to protecting human health and the environment, and we promote the health and safety of our employees and the public in the communities in which we operate.”
Raser Technologies, Inc. (NYSE:RZ) “Raser Technologies develops innovative, high-performance electric motor and controller technology for clean renewable power.”
Suntech Power Holdings Co., Ltd. (NYSE:STP) “We combine innovative solar power technology with nature’s most abundant resource to deliver clean, efficient energy.”
Unilever Plc (NYSE:UL) “Our mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people look good, feel good and get more out of life.”
I “invested” $10,000 in each stock and stepped back to watch the action. It has certainly been exciting. Not having much to do with the market before this, it was a fascinating look into the stresses and ups and downs of the game. Over the course of a month we crept up into the top 14% of investors on MarketGuru. Currently, as I write this, we are standing at a gain of 6%. Considering that the NASDAQ has fallen by almost 19% over the same time-period that’s not too shabby!
Considering the current state of the economy it does look like there is faith in the environmental movement. Let’s hope that the principles on which the “greenies” work are adopted as well. The best summary of those principles is with “the three r’s” – reuse, reduce and recycle. This along with making sure that what you are doing is ethical are probably good rules of thumb for everyone in every sector.
This was an experiment, but an interesting one.