Huntington’s Top Stocks: Here’s Why Eco Investments are Smart Investments

Huntington’s Top Stocks: Here’s Why Eco Investments are Smart Investments

Research  these Stocks on Kapitall’s Playground Now

 
research now

"Long term investors earn return on capital when investing in identifiable trends," says Brian Salerno of Huntington Funds in an interview with Kapitall. He’s partial to one trend in particular: Environmental responsibility.

He's so keen that he talked Huntington Funds into launching the very first environmentally focused active exchange traded fund (ETF), The Huntington EcoLogical Strategy Shares ETF (HECO). Salerno makes sure to point out the capital L for logical, as in profit.

On Why Ecological Investments are Smart Investments

A Harvard Business sustainability study showed that over the long-term, in this case two decades, companies that pay attention to environmental social impacts tend to report superior performance.  In addition, companies better at incorporating environmental responsibilities are inherently better-protected and defended against regulatory threats.

“That got me thinking. The rise of environmental responsibility is a global megatrend: Alternative energy, biofuels, recycling, organic food, fuel efficiency, smart grid, biodegrade materials, we realize it is all one thing.”

Eco investments are in every segment of the economy, so Salerno pays no heed to the funds and indexes narrowly focused on solar panels and electric cars. He says these are immature industries with “unproved business models.”

Huntington’s stock picking strategies can be found in detail here. They emphasize growth, a solid business model, and long-term sustainability. As Huntington’s Mike Weiner described it, "We invest in good stewards of the environment, who are also good stewards of our capital."

Fund Favorites: Today’s Winning Eco Industries

Organics: “Organic food is an identifiable green industry that is rapidly growing. There are many companies today with solid investible [sic] business models. They’re not waiting around for any subsidy check from the government.”

Salerno particularly likes the organic grocer Whole Foods (WFM) and The Hain Celestial Group, Inc (HAIN), maker of a number of earthy natural organic products from teas to skin care products.  These two firms represent the top holdings of the HECO ETF.

Long-term growth potential is staggering. Many of us and many of our children will grow up to feed their children only organics.  It goes to follow that when our children become investors they’re going to want environmentally responsible investments, and all the companies that want to be purchased by these investors will improve their practices. “It’s a feedback look that will get stronger and stronger.”

Unusual Finds

Some unlikely suspects can come up in a search for environmental responsibility.

Consider Tennant Company (TNC), which specializes in floor scrubbers. At first look this may seem like an odd eco choice, but their business is quite logically connected; they incorporate a technology that ionizes the water they put on the floor that bonds on the molecular level with dirt and bacteria and sucks it back up clean. It kills bacteria and completely removes the demand for bleach and other harmful chemical cleaners that enter our home and water system. What’s more, it functions better than bleach simply because human error is so prevalent (did you know it takes a number of minutes for bleach to kill bacteria? People typically don’t let the chemicals sit long enough).

“Over long term I think this kind of technology can be incorporated into a lot of different applications.  It’s an up and comer I really like it. It’s a small company with no subsidies and a totally green and ecological name.”  He adds “If we suddenly, as a planet, start to calculate the cost of flushing chemicals down the drain, then companies over time will have to record the chemicals they send down,” implying TNC’s niche in correcting that problem.

Trex Company (TREX) is a great recycler. The firm takes grocery store plastic bags and mixes with sawdust to create composite boards for deck projects. The company's stock took a hit with the housing market but is slowly coming back. "Eventually profits will rebound, and the firm is only operating at about 50% capacity right now."

EBay (EBAY), Disney (DIS), Johnson & Johnson (JNJ) and Starbucks (SBUX) are great franchises Huntington likes and think have more growth ahead. "They find their way in our universe because they are good environmental stewards."

The waste management leader aptly named Waste Management Inc. (WM) also fits, and has been noted in the past for their environmental actions, including making 90% of new trucks natural gas powered. "Their business is in waste energy and it’s a good company. We don’t own them today, but we could own them."

Water is an issue that spans from scarcity to reuse to cleanliness and overpopulation, so Salerno has his eyes on several filter and equipment companies that specialize in big water projects. This includes Tetra Tech Inc. (TTEK), which provides consulting and engineering for big development projects and is involved in all kind of water treatments and cleanups.

More "obvious" players are often ruled out. This is includes desalination which turns salt water into fresh drinking water. It’s a tough play because it’s a lumpy business requiring multi billion dollar efforts and is often part of other corporations. General Electric (GE) is a good example of this.

Common Sense

“Why is it a dumb idea to consider the ramifications of your actions? When has it been stupid to consider consequences?” asks Salerno. “People want to make this a political argument, it doesn’t have to be political, and you can be young, old, Democratic or Republican.”

Indeed Huntington is far from radical in their approach. Others in the investing world have been latching onto this trend for years: Socially Conscious investing was a $1.5 billion industry in the 1990s has boomed into a $3 trillion industry today.

“Looking forward, maybe not today, maybe not next year or in 10 years, but some point in time, as we learn more about the consequences of our actions we’ll see there are very large risks to the things we are used to doing.”

Business Section: Investing Ideas

Looking to “green” your portfolio and make logical investment choices? You could do much worse that starting with the top picks of the pros.

Here’s The EcoLogical Strategy ETF (HECO) top holdings as disclosed in the interview dated June 18, 2012. All of these firms either have environmental theme or are good environmental stewards, meaning their business could have nothing to do with the environment but they are incorporating environmental responsibilities in their daily company by managing and measuring their impact and holding themselves to tougher guidelines.

Do you agree this trend will continue to gain traction?

 

 

1. The Hain Celestial Group, Inc. (HAIN, Earnings, Analysts, Financials): Together with its subsidiaries, manufactures, markets, distributes, and sells natural and organic food, and personal care products in the United States and internationally.

 

2. Whole Foods Market, Inc. (WFM, Earnings, Analysts, Financials): Engages in the ownership and operation of natural and organic food supermarkets.

 

 

3. eBay Inc. (EBAY, Earnings, Analysts, Financials): Provides online marketplaces for the sale of goods and services, as well as other online commerce, platforms, and online payment solutions to individuals and businesses in the United States and internationally.

 

4. Questar Corporation (STR, Earnings, Analysts, Financials): Operates as an integrated natural gas holding company.

 

 

 

5. Spectra Energy Corp. (SE, Earnings, Analysts, Financials): Engages in the ownership and operation of a portfolio of complementary natural gas-related energy assets in the United States and Canada.

 

 

6. BorgWarner Inc. (BWA, Earnings, Analysts, Financials): Engages in the manufacture and sale of engineered automotive systems and components primarily for power train applications worldwide.

 

 

7. LKQ Corp. (LKQ, Earnings, Analysts, Financials): Provides replacement parts, components and systems needed to repair vehicles (cars and trucks). Has a focus on used, recycled and refurbished products.

 

 

8. Johnson & Johnson (JNJ, Earnings, Analysts, Financials): Engages in the research and development, manufacture, and sale of various products in the health care field worldwide.

 

 

9. Starbucks Corporation (SBUX, Earnings, Analysts, Financials): Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores.

 

 

10. NextEra Energy, Inc. (NEE, Earnings, Analysts, Financials): Engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada.

 

 

11. Teradata Corporation (TDC, Earnings, Analysts, Financials): Provides enterprise data warehousing solutions, including enterprise analytic technologies and services, and integrated marketing software.

 

 

12. Costco Wholesale Corporation (COST, Earnings, Analysts, Financials): Operates membership warehouses that offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities.

 

 

13. Walt Disney Co. (DIS, Earnings, Analysts, Financials): Operates as an entertainment company worldwide.

 

 

 

(Written by Rebecca Lipman)

 

Use Kapitall's Tools: Looking for ways to analyze this list?

Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall's tab navigation to browse through the data…

 

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

New to Kapitall?

1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter

 

 

ABOUT KAPITALL WIRE

Kapitall Wire, which is not a broker/dealer, offers free cutting edge investing ideas, lively commentary and timely analysis of companies enhanced by interactive tools. And the Investing 101 section breaks complex concepts down to their basics, offering education to novices that doubles as a refresher course for more seasoned investors.

Kapitall Wire is a division of Kapitall Inc. Securities products and services are offered by Kapitall Generation, LLC, member FINRA/SIPC . Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

playthemarket640jpg

5 Responses to “Huntington’s Top Stocks: Here’s Why Eco Investments are Smart Investments”

  1. Trex is really a great company to get on board with right now. It's hard to imagine how they could do worse than they're doing–the environmentally friendly company makes products that actually help to keep wood and plastic scraps out of the landfills.

  2. anny says:

    I have come to the conclusion that we all have a little blame global warming and its consequences and guilt even more politicians who do not slow down. http://www.globalwarmingweb.com/

  3. Andrew MacDonald says:

    Electric car is very useful to keep our environment safe and clean. We have to use cars, those are not smokey and can be less expensive in terms of expenses or fuel charges. Electric car is a better option for that. Electric cars are also cost you less in terms of their expenses. Car repair is very necessary for the better performance of your car. I always prefer to service centers or garages for the repairing of my car. For Porsche Repairalways consult with the best service providers.

  4. This is really a very good post related to investments and from this we can get proper information related to where to do investments and where not. From my point of view we can make our investments in car business. As so many branded beautiful cars are there in the market the Craig for cars are increasing day by day with the peoples. So, we can do great business with cars. .

  5. Electric powered auto can be quite beneficial to retain types secure in addition to clean up. We need to utilize cars and trucks, those people are certainly not smokey and will possibly be cheaper with regard to bills or even gas expenses. Electric powered auto is often a greater selection for the. Electric powered cars and trucks may also be amount to a lesser amount of with regard to their bills. Car or truck fix can be quite required for the better efficiency of one's auto. I usually prefer to assistance centers or even garages to the fixing regarding my personal auto.

Leave a Reply

Protected by WP Anti Spam

playthemarket280jpg