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Did you see how alternative energy stocks have swooned in the past two months? A lot of hot money rushed out of the sector on fears that the global recovery was overdone. Now for the good news — this may be the buying opportunity for 2010, staring you right in the face!
Why? Because governments around the world are poised to throw money at alternative energy, smart-grid technology and other green projects. That deluge of money should lift the boats of green energy companies — some a lot higher than others.
While I don’t know if the global economy will continue to recover in 2010, I do know that only a fool stands in the way of a flood of government money — AT LEAST $120 billion over the next two years.
This is happening because China, the U.S. and the 27-nation European Union signed the Copenhagen Accord — the first climate-protection agreement with numerical goals for all the biggest greenhouse-gas emitters.
It doesn’t matter if you think the Copenhagen Accord isn’t worth the paper it’s written on. It doesn’t matter if you think global warming is a hoax. What matters is that governments around the world have pledged to reduce their greenhouse gas emissions, and the only way to do that is to transition to alternative energy stocks.
- China told the United Nations Framework Convention on Climate Change it supports the Copenhagen and reaffirmed its goal to cut carbon-dioxide emissions per unit of gross domestic product by 40% to 45% from 2005 through 2020.
- The EU has promised to cut emissions 20% by 2020 from 1990, with the potential to increase the reduction to 30% if other countries follow suit.
- Canada will cut its carbon emissions by 17% from 2005 levels over the next 10 years, according to Environment Minister Jim Prentice.
- India committed to reduce the intensity of its carbon emissions by 20% to 25% by 2020 from 2005 levels.
- The U.S., the biggest historical emitter, has signed up to cut emissions 17% from 2005 levels by 2020. The U.S. has set a goal of doubling renewable energy production by 2020.
According to Bloomberg New Energy Finance, wind and solar developers around the world will benefit from $120 billion of stimulus spending on clean-energy globally over the next two years.
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Globally, governments invested $25 billion in renewable power and energy efficiency projects in 2009. This is going to mushroom to $60 billion in 2010 and another $60 billion in 2011, as nations around the world race to lower their greenhouse-gas emissions, according to Bloomberg.
If anything, this is an under-estimate. According to the New York Times, the Chinese government poured an estimated $440 billion into clean energy last year alone!
Why are all these countries doing this? United Nations scientists warn of dire consequences for the planet if action isn’t taken to fight climate change — catastrophic sea-level rise, a die-off of many species of animals and plants, and the decimation of global agriculture.
Another potential plus for renewable energy boils down to one word: Jobs. A study by collaborative research teams at the University of Illinois, Yale University and the University of California says there is the potential for 1.9 million renewable energy jobs in America. Other countries see jobs potential in green energy as well. In a tough economy, especially in an election year, you can see how alternative energy could become a magnet for government money.
And you can see how even the most cynical politician, one who thinks climate change is a hoax, could sign on to bring new jobs to his district.
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| Global governments are investing billions of dollars to reduce their greenhouse-gas emissions. |
No Such Thing as a ‘Sure Bet!’ But Powerful Forces Are Lining Up in Green Energy’s Favor
Are there risks? Of course. Governments could change their minds and cut funding. Some “game changer” in energy could wipe competitors off the playing field. Don’t ever come away with the impression that alternative energy stocks are a sure bet.
But here’s the key reason I think any price dips will be short-term. Peak Oil is real, and we are on a collision course with another energy crisis.
Heck, just look at ExxonMobil. Worldwide, 40% of Exxon’s 2007 and 2008 exploration wells were failures, up from 36% in the prior two years, recent company filings showed. And it’s not for lack of trying! Exxon is searching the ends of the Earth for oil and coming up empty.
That’s why Exxon rushed to buy Fort Worth, Texas-based XTO for $30 billion, Exxon’s largest takeover since 1999. XTO is a shale gas play — alternative energy! If ExxonMobil is moving into alternative energy, that sure looks like a trendsetter to me.
Heck, just look at BP. Last year, BP announced the discovery of a “giant” oil field in the Gulf of Mexico. To find it, BP had to drill as DEEP as Mt. Everest is TALL.
If BP could find oil at shallower depths, it would. It can’t! Because the oil is so deep underwater and so difficult to extract, the price of oil will need to be above $70 a barrel to make drilling profitable. That may not signal the end of oil, but it signals the end of cheap oil.
And this “giant” oil field contains potentially 3 billion barrels of oil — enough to feed America’s thirst for oil for just 153 days. After that, then what?
Heck, look at the pitiful pace of global oil discoveries. It’s not just BP and Exxon that are coming up short. It’s the world!
Last year, 10 billion barrels of oil were added to global oil reserves, the highest rate since 2000. However, the world is consuming around 83 million barrels a day, which equates to 31 billion barrels a year. So, even in a good year, we barely replaced one third of the oil we consumed.
The Time Has Come for Alternative Energy
In my view, there won’t be just one replacement for oil. Instead, it will be a patchwork of many solutions — solar, wind, biomass, hydropower, even nuclear power. Some of these technologies are already well developed … others are still in the early stages.
The good news is green energy is making technological leaps and bounds. This is bringing down costs — dramatically. At the same time, both private and national investors are making the shift to alternative power. There is a window of opportunity to make the shift from “standard” fossil fuels to alternative fuels. And this window could open on a golden age of green energy.
Put it all together — the worries about climate change, the flood of government money, the lack of new, cheap sources of oil, and alternative energy isn’t just the wave of the future. It’s a tsunami!
My New Report Is Poised to Power Up on the Surge in Renewables
I’m issuing a brand-spankin’ new report — “The Golden Age of Green Energy.” It includes in-depth analysis of the forces driving the alternative energy stocks, highlighting many red-hot companies and rock-solid funds — as well as stocks and funds you should avoid.
In this special report, I’m also naming my seven superstar picks in alternative energy.
Here’s a sneak peak …
Alternative Energy Pick #1: Biomass
Turning waste into energy is a process that has been going on for hundreds of years, and it’s getting much more sophisticated. What’s more, it’s an alternative energy system that works.
That’s why my first pick is a small-cap company that provides waste disposal services and sells the electricity and steam generated by the waste.
The company has been beating earnings estimates in recent quarters, and demand for its services will only grow. It should be a winner for the long term.
Alternative Energy Pick #2: Solar
Solar power is a technology that’s still in the developing stages, but that potential is enormous. After all, the sun is a 170-billion-megawatt fusion reactor we have barely tapped. And solar is making strides by leaps and bounds!
Third-generation solar power — what is on the market today — is about 50% more efficient than second-generation photovoltaics. And there is some new, 4th-generation solar technology that promises to crank up the energy output by more than was previously dreamed possible.
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| Solar power is still in the development stages, but its potential is enormous. |
There are many good choices in solar (and some bad ones, too). But as they say in the gold fields, why buy one prospector when you can buy the guy selling picks and shovels to many miners? That’s what my second pick does — it’s a provider of solar power manufacturing equipment.
It has a lot of exposure to the booming solar market in China, and it keeps signing up new customers. With the financial markets loosening up and China shooting money at renewable with a firehose, this stock should be a big winner.
Alternative Energy Pick #3: Natural Gas-Powered Vehicles
Electric cars may be part of our future, but one alternative fuel that can power cars on the highways now is natural gas. And there is a company that is on the cutting edge of this bright future in transportation. This company is inking contracts all over the map with airports, waste-haul truckers, bus companies and more.
This stock is down in the dumps now, but it should start turning a profit soon. That’s when I expect its share price to shift into high gear. Be sure you’re onboard before that happens!
Alternative Energy Pick #4: Oil Sands
Canada’s oil sands production could rise to over 6 million barrels per day in a few decades, becoming a big piece of our future energy picture.
That’s why I’ve got my sights on a company that is digging deep into the oil sands and coming up with buckets of profits. Its production costs are very low, and likely to go lower.
Earnings are rising, and this oil sands operator pays a nice fat dividend, too!
Even better, the company has huge reserves of oil, and you can buy those reserves — even after costs are counted in — for about 20 cents on the dollar. Is this stock a bargain? Heck, yeah!
Alternative Energy Pick #5: Wind
I’ve got a second “picks and shovels” play for you. Just like with solar, the best part of wind power is owning the company that makes the equipment that wind farms use. In fact, this company is becoming the go-to company for utilities to adapt wind systems to their power grids.
Half the company’s sales come from outside the U.S., making it less vulnerable to a U.S. downturn and better able to ride resurgent economies overseas. The stock pays a small but growing dividend, and it trades at a discount to its peers. You’ll want this one in your portfolio.
Alternative Energy Pick #6: The Smart Energy Grid
The cheapest source of new energy is to use less of it, and therefore make the energy you have go further. A smart grid helps you do that, by managing energy usage more effectively. That’s why the expected upgrade to a smart electrical grid in the United States is a massive opportunity. The Obama administration announced a $3.4 billion package in 2009 to help build a smart electric grid meant to trim utility bills and reduce blackouts.
My pick in this sector is a company that makes the software and hardware that help control energy load, read meters remotely, manage billing, and detect theft and outages. It has a global customer base, so it should ride the wave of smart grid applications all over the world. Finally, it’s on the road to making profits, and this stock should ramp up, and soon!
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| Plans are in the works to build a smart electric grid that will trim utility bills and reduce blackouts. |
Alternative Energy Picks #7: My Two Best Funds
I have my two best alternative energy funds for you. They’re very different, and they’re both holding baskets of stocks that are poised to make a killing on the bright and shining future in alternative energy.
In All, These Are 7 of My Best Picks — The Crown Jewels of What Should Be a Golden Age of Green Energy
Some of my picks are large companies — some are so small, you’ve probably never heard of them. One thing they all have in common: they’re in the vanguard of this boom. They’re the ones in the forefront of new technology and development. They’re the companies that the big behemoths are hunting down for potential buy-outs.
And they’re all yours at a huge discount if you sign up now.
This report will sell for $149 when it is published on Monday, February 15th. But if you buy it now, you can get it for $99 — fully one-third off the cover price.
Even better, this price includes the report and three follow-ups.
If you feel you can’t afford it, please don’t buy it. But consider this: The biggest money in the world — government money — is poised to flood into this sector. You can’t afford not to take advantage of this gold rush in green energy.
The toll-free number to call is 800-291-8545.
Just say you want “The Golden Age of Green Energy” plus all my follow-up reports on all my picks. Or, order online at my secure website.
Best wishes,
Sean
P.S. Remember: By signing up before February 15th, you get a double benefit: You will be among the first to get this information, giving you a jump on other investors. Plus, you will save 33% off the cover price. So I suggest you call 1-800-291-8545 right away.
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Uncommon Wisdom (UWD) is published by Weiss Research, Inc. and written by Sean Brodrick, Larry Edelson, and Tony Sagami. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in UWD, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in UWD are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Kristen Adams, Andrea Baumwald, John Burke, Amy Carlino, Selene Ceballo, Amber Dakar, Dinesh Kalera, Red Morgan, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.
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