Monday, June 29, 2009

Unconventional Wind-Energy Plays (WGOV, FDML, AMSC, FAN, GE, SI, OTC:VWDRY.)

From Investopedia:
...In 2007, wind power became the first $30 billion clean energy industry. According to a 2008 Earth Policy Institute report, one in three nations now receives a portion of electricity from wind and 13 countries use turbines to generate at least 1000 MW of power. Both Spain and Germany now generate 10% of their total energy used for consumption through wind power. The cost of wind energy has declined nearly 90% since the 1980s and the Department of Energy estimates that current wind projects will actually produce cheaper electricity than conventional power plants by 2010. With this in mind, the future market for wind power seems robust and warrants further investigation. (For more, see Top 10 Green Industries.)

Thinking Small
While most investors wanting to participate in the wind sector often focus on conglomerates such as General Electric (NYSE: GE) and Siemens (NYSE: SI), or wind-based utilities such as Vestas Wind (OTC: VWDRY.PK), there are other ways to profit from this important expanding industry. A cursory glance at the First Trust Global Wind Energy ETF (NYSE: FAN), the leading ETF in this category, shows a varied mix of companies. Some of the more interesting are those that provide the equipment necessary to build and erect these structures. By placing bets on these companies, investors can profit regardless of the end user.

A Few Picks from the ETF
With nearly 3500 MW of installed power using its CONCYCLE converters, Woodward Governor (NASDAQ: WGOV) is becoming the go-to company for utilities to adapt wind systems to their power grids. By making the equipment that's needed to turn the turbine's kinetic energy into electrical energy, Woodward is providing an absolutely essential part of the wind energy chain. The company also provides various other power generation and power transmission equipment and could be a big winner from the recent stimulus package. The company reported a 38% decrease in second-quarter profit due to restructuring charges, but did raise its guidance for full year 2009. The stock trades at a measly 13 times earnings and pays a 1.1% dividend.....MORE