Author: Mark Henwood

Sustainable energy stocks rewarded investors again this week. All of the Camino indices advanced, one significantly.

The Solar index followed last week's 19.6% gain with another big advance of 14.5% paring the YTD decline for the sector to –24.6%. 28 stocks increased and 4 decreased. The index increased 7.1% on Friday alone, apparently responding to the introduction of the Clean Energy Stimulus Act in the US Senate.

LDK Solar (LDK) led the way with a 25.6% rise. On Friday LDK announced is had sold 83 MW of wafers and lined up supply agreements for much of the order period.......two-thirds of the weekly price increase occurred Friday. Yingli (YGE), the second largest gainer at 24.8%, also reported sales contracts covering 3.3 MW of modules to Korea. For Yingli that comes out to about USD 100 million of market cap increase per 1 MW of sales.

In the Renewable Electricity sector Camino’s index advanced 0.9% with 13 stocks climbing and 5 retreating. The index was weighed down by Goldwind’s [002202.SZ] 22% decline culminating a 71% price decrease from its February 21 peak. The Shenzhen Exchange reports a P/E figure for the company that even after these declines is still a lofty 65. In our view this price level may now be sustainable if the company is able to maintain strong growth.

Biofuels gained 1.1% with 10 stocks rising and 5 stocks falling. Gushan (GU) held on to last week's huge increase with a gain of 2.9%. The sector leader was CropEnergies [CE2.DE] with a 10.3% gain. The company issued a statement expressing its view that the regulatory environment continued to be generally supportive and reporting on its capacity plans.

Fuel Cells also had a positive week with the index increasing 2.3% on 4 stocks advancing and 3 stocks declining. FuelCell Energy (FCEL) led the group with a 16.6% gain. We scoured the news but didn’t see any information that would drive this increase. We also looked a variety of analyst recommendations and didn’t see any significant company specific news this week.
Over the last 100 days Solar has maintained the highest beta (.95) of all the Camino indices (which ranged from 0.18 to 0.55). Solar has now regained about one-half of the declines from its peak on December 27 to its low on March 10. While some of the gain is driven by broader market gains and enthusiasm about legislation in the US, I’m sure investor’s will be starting to assess whether the growth news can support further price gains.

Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks. He also is an investor in sustainable energy stocks.

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