Power Up Your Portfolio With Power-One
The Dynamic Wealth Report
August 26, 2010
by Robert Morris, Editor
“Renewable energy is the fastest growing source of electricity
generation…”
This quote from the U.S. Energy Information Administration says it all. The transition to an economy run on renewable energy is happening right
now. Solar power, wind power, geothermal… these are no longer the stuff
of science fiction.
Countries all over the world are making huge investments in renewable
energy.
Europe is leading the way… the EU countries together invested a massive
$41.1 billion in renewable energy in 2009. China was a close second
investing a hefty $34.6 billion. And the U.S. was third at $18.6
billion.
All together, a whopping $162 billion was invested globally in renewable
energy last year. And, the spending isn’t slowing down. According to
Bloomberg New Energy Finance, spending on renewables is expected to
increase in 2010 to record levels… $175 to $200 billion.
The race for renewable energy is clearly heating up.
And for good reason…
Global power needs are expected to double over the next 15 years. But
fossil fuels like oil and coal are being blackballed because of their
environmental impact.
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Fossil fuel emissions create harmful air pollution and contribute to
global warming. Oil drilling and coal mining disturb land and ocean
wildlife habitats. And converting fossil fuels into usable forms create
solid waste and disposal problems.
Over time, the cost of fossil fuels is expected to rise sharply. And the
supply of readily accessible fossil fuels won’t be able to keep up with
skyrocketing demand.
No doubt about it, global government and private investment in renewable
energy is only going to go higher and higher.
This is great news for renewable energy companies.
While there are many different kinds of renewable energy sources, two of
them are garnering most of the attention and investment dollars. Solar
power and wind power.
The U.S. plans on doubling both solar and wind capacity by 2012. And
China has even bigger aspirations. They’re expected to become the
world’s largest producer of wind power by 2013 and the top solar market
within five years.
This bodes well for one company in particular… Power-One (PWER).
PWER is a small but fast growing provider of inverters to the solar and
wind power industries. Inverters are a critical component of electricity
generation systems. These amazing devices convert electricity from wind
and solar so it can be fed back to the grid.
The market for inverters is huge and growing rapidly.
Last year, $4 billion was spent on solar and wind inverters. That’s a
43% increase over 2008. And according to market researcher, iSuppli,
the inverter market will nearly double over the next five years.
While the market is growing fast, PWER is growing even faster.
The company just moved into second place on the list of the world’s
largest manufacturers of power inverters for the renewable energy
market. PWER now owns an impressive 11% share of this fast growing
market.
And, if you’re still not convinced, a glance at the most recent earnings
report will show you this company’s on fire…
Revenue soared 135% to a record $215 million. Net income rose
significantly from a loss of $7 million to a profit of $24 million. And
earnings of $0.17 blew away analysts’ estimates by 70%.
Despite the company’s high octane growth, the shares are badly misvalued.
At a recent price of $9.92, the shares are trading at just 13.6x the
2010 estimate of $0.73. That’s an extremely low P/E for a company
expected to grow earnings 51% a year for the next five years.
Given the positive industry outlook, the company’s huge growth forecast,
rising earnings estimates, and misvalued stock price, I wouldn’t be
surprised to see these shares double in value over the next year. Grab
your shares of PWER to ride the rising tide of renewable energy.
***Editor’s Note*** Just as an FYI, there’s something afoot in the
energy
sector. We’re starting to see some big investments being made by some of
the world’s savviest investors- guys like Warren Buffett, Carl Icahn,
George Soros, and even Bill Gates. We’re in the midst of preparing a
FREE report that details exactly what we see going on- and how you can
profit from it.
• Renewable Energy ETFs Heading Higher
Investors are piling back into renewable energy stocks today. The
industry is on fire after a strong second quarter. And many of them
provided better outlooks going forward. Several renewable energy ETFs
are jumping today:
Elements CS Global Warming ETN (GWO) is up 9.8%
Elements MLCX Biofuels Index ETN (FUE) is up 8.8%
First Trust Clean Edge Green Energy ETF (QCLN) is up 2.8%
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