The debate surrounding fracking's environmental impact continues. Is alternative energy better for your portfolio?
Hydraulic fracturing, widely known as “fracking”, is one of the most contentious issues in the US today. A new report from researchers at Duke University further complicates the debate surrounding the process’s environmental impact.
According to Bloomberg, the researchers performed independent testing on water wells in a Texas residential area close to a gas drilling area operated by Range Resources Corp. (RRC). The researchers discovered dangerously high levels of methane, an explosive gas, in the wells. This directly contradicted the results of Range Resources’ earlier study on the impacts of drilling on the water supply.
In 2012, the drilling company conducted tests on water wells in Weatherford, Texas as part of a settlement with the Environmental Protection Agency. Range Resources found that all but one of the twenty wells tested had minimal levels of methane.
Alternative energy at CES
Meanwhile, alternative energy received quite the boost lately thanks to various product launches and demonstrations at the Consumer Electronics Show (CES) 2014 in Las Vegas, Nevada. Ford (F) revealed a prototype of its C-MAX Solar Energi Concept, a solar-powered hybrid vehicle. Solar power was the energy source of choice for other devices, including Eton’s newest wireless speakers and cell phone cases with batteries from Ascent Solar Technologies, Inc. (ASTI).
The results of the Duke study and alternative energy's showing at CES inspired us to look for investment opportunities among clean energy stocks. To begin, we started with a list of US clean energy stocks pulled from the Ardour Global Alternative Energy Index, the NASDAQ Clean Edge Green Energy Index, the NASDAQ Clean Edge Smart Grid Infrastructure Index, and the Renixx Renewable Energy Industrial Index.
We then screened for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter comprising at least 5% of share float. Such activity indicates that institutional investors, including hedge fund managers and mutual fund managers, expect these stocks to outperform into the future.
Finally, we looked for an additional indicator of upside potential and screened for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages (MA). This indicates that these stocks have strong upward momentum.
We were left with four clean energy stocks on our list.
Click on the interactive chart below to see sales data over time.
Do you think there's more upside potential in store for these clean energy stocks? Use this list as a starting point for your own analysis.
1. Pure Cycle Corp. (PCYO, Earnings, Analysts, Financials): Engages in the design, construction, operation, and maintenance of water and wastewater systems in the Denver metropolitan area as a vertically integrated water and wastewater service provider.
Market cap at $158.65M, most recent closing price at $6.60.
Net institutional purchases in the current quarter at 812.2K shares, which represents about 5.83% of the company's float of 13.94M shares.
The stock is currently rallying 6.82% above its 20-day MA, 3.82% above its 50-day MA, and 12.66% above its 200-day MA.
2. PowerSecure International, Inc. (POWR, Earnings, Analysts, Financials): Provides energy technology products, services, and data management systems to industrial and commercial users, and suppliers of natural gas and electricity.
Market cap at $381.70M, most recent closing price at $18.78.
Net institutional purchases in the current quarter at 2.5M shares, which represents about 12.04% of the company's float of 20.76M shares.
The stock is currently rallying 8.68% above its 20-day MA, 7.86% above its 50-day MA, and 19.90% above its 200-day MA.
Market cap at $579.92M, most recent closing price at $19.20.
Net institutional purchases in the current quarter at 2.1M shares, which represents about 15.73% of the company's float of 13.35M shares.
The stock is currently rallying 6.62% above its 20-day MA, 15.48% above its 50-day MA, and 28.33% above its 200-day MA.
4. Valmont Industries, Inc. (VMI): (VMI, Earnings, Analysts, Financials): Produces and sells fabricated metal products, pole and tower structures, and mechanized irrigation systems in the United States and internationally.
Market cap at $3.97B, most recent closing price at $148.94.
Net institutional purchases in the current quarter at 1.6M shares, which represents about 7.79% of the company's float of 20.55M shares.
The stock is currently rallying 4.79% above its 20-day MA, 6.08% above its 50-day MA, and 6.62% above its 200-day MA.
(List compiled by Mary-Lynn Cesar. Institutional data sourced from Fidelity. All other data sourced from Finviz.)
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Pure Cycle Corp. (PCYO, Chart, Download SEC Filings)
- PowerSecure International, Inc. (POWR, Chart, Download SEC Filings)
- Green Plains Renewable Energy, Inc. (GPRE, Chart, Download SEC Filings)
- Valmont Industries, Inc. (VMI): (VMI, Chart, Download SEC Filings)
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