Investment Ideas From The Green Building Expo
The Dynamic Wealth Report
March 18, 2009
Are You A Believer?
by Brian T Mikes, Editor
This weekend I went to a Green Building Expo here in Phoenix. What a way
to spend a Saturday morning. After fueling up with a hearty breakfast,
Linda and I hit the show. Our strategy was simple. We wanted to see
everything out in the market.
While wandering around, I discovered a great investment idea. Before I
tell you about that idea, let me answer your first question. “Why was I
spending my weekend at a building expo?”
The answer’s simple.
I’m looking to buy a new home here in the Phoenix area. After spending a
few weekends touring various “opportunities”, I realized something. Some
of the best housing deals could be found in “fixer-uppers”.
The more looked-at houses, the more I realized many would need major
overhauls. For some, the entire kitchen needed to go. In others, the
bathrooms hadn’t been updated in decades. One house had no insulation –
none. Why the house has stood for 20 years without adding some-thing as
simple as insulation was beyond me. To each their own… I guess.
-------------Sponsor-------------
Where Can You Turn $300 Into $1.3 Million Right Now?
Our own small-company specialist, Robert Morris, has found a
way to 'sniff out' tiny penny stocks on the verge of a major breakout. And
the timing for this has never been better.
You see, the system takes advantage of an obscure SEC regulation that
sends penny stock prices through the roof.
We've seen some stocks gain 852%... 5,450%... even 17,496% in no time
flat.
Click here
for the details...
-----------------------------------
Realizing some work would need to be done on any house we bought, I
started thinking about how to make my new home green.
No, I’m not turning into a hippie. I’m not trying to be “Green” because
it’s popular. I’m looking at it as a way to save money. Very capitalist,
don’t you think?
Here’s my thinking. One of the biggest housing expenses (other than the
mortgage) is summer cooling costs. Out here it can hit 120 degrees
during the summer months. It’s not unusual to string together 10 or more
days of 110 degree heat.
You know it’s hot when nighttime temperatures are in the 90s!
Anyway, I figure if I‘m spending the time and money to renovate, I might
as well do it in a way that saves me money. And if it saves the
environment too, it’s a “Win – Win”! I’ve started looking at proper home
sealing, insulation, thermal wrap, attic vents, heat pumps, thermal
heating and cooling… the list goes on.
What I’ve discovered is all this stuff can save homeowners money. But it
costs a big chunk of change up front. And often your payback is measured
in years… sometimes decades.
So, back to the Green Building Expo.
The biggest thing I noticed was you couldn’t walk five steps without
bumping into someone selling solar modules. Some of these contractors
offered installation. Others provided “consulting” to homeowners looking
to install systems. All of them came with tons of information on
rebates, tax incentives, credits, even a blessing from the local energy
companies.
I was shocked at the amount of federal, state and utility funding that
could be had.
A $20,000 system was price reduced to $5,000 because of all the
government incentives. However, at those levels, the payback was still
measured in 7 to 10 years. I started asking about various manu-facturers. I asked about efficacy ratios. I asked about lead times.
In this downturn, many of the installers were still doing a brisk
business.
And that got me thinking about my days as an alternative energy
investment banker. One of the companies I pitched was SunPower (SPWRA).
They were originally spun out of a semiconductor company. Not a big
deal until you realize they were able to harness the knowledge of
semi-conductor processing to improve their production. This put them on a
level second to none.
Now because of the economic downturn, SunPower has lowered their
guidance. Who hasn’t? That being said, the company still expects to do
between $1.6 and $2 billion in revenue. Why the fall off? Well of course
the economy is to blame. Also, as demand has fallen, it freed up some
supply and that’s caused companies to readjust pricing.
Normally this would be a huge concern, but not for me. As the cost of
solar cells falls, they become more affordable. I truly believe once
pricing touches a level where homeowners see a repayment in 2 to 5
years, demand won’t just move higher, it will rocket higher!
That might still be a few years away. For now, you’ll be glad to learn SunPower’s earnings are looking strong. Management
is expecting to report
earnings of between $2.20 and $2.80 a share.
Not bad considering the stock trades for around $24 a share. That means
their EPS (at the low end of the range) is a strong 10.9x. Keep in mind
this was a company who a few months earlier was trading for over $100 a
share.
Long term this is an industry I really like. Think about it this way. In
a few years housing prices will be stable, energy prices will no doubt
be higher, and the cost of installing solar power will be lower. Toss on
government incentives driven by the new Obama Presidency and you have an
industry on the verge of more than doubling or tripling in size.
Check out the solar industry, and SunPower in particular. I think it’s a
great industry to be invested in long term.
• Wheat ($5.44 per bushel)
After skyrocketing early last year, then falling dramatically, it looks
like wheat has finally stabilized. As a matter of fact, prices are now
at a one month high. We’re still nowhere near last year’s peak, but at
least we’re not stumbling along the bottom.
Print
Page
Bookmark Us
Home | Whitelist Us |
Terms of Use |
Privacy Policy |
Contact Us | Security |
Site Map