SUN’S A GOOD INVESTMENT

From the “it’s always something” file: Lutts points out that the most recent jump in oil prices came from the threat of supply disruptions associated with the Turkey/Kurdistan/Iraq/Iran mess. There are so many reasons for the US to get busy with New Energy that it is harder every day to believe our national leadership can't get behind it. But near the top of the list has to be: IT'S GOOD FOR THE BOTTOM LINE!

Here Comes The Sun; Commentary—Energy spike heating up solar shares
Timothy Lutts, October 17, 2007 (The Cabot Market Letter via Marketwatch from Dow Jones)

WHO
Timothy Lutts, investment advisor

One of the companies Lutts especially likes. (click to enlarge)

WHAT
Lutts points out the growing value of investment in solar energy companies.

WHEN
At the onset of Halloween, as Lutts prepares his house for winter, he thinks about the cost of home heating.

WHERE
Lutts writes from Salem, Mass, and offers a New England perspective.

WHY
- The costs of heating oil and gas are at record highs and likely going higher. Causes: (1) China, India and developing nations’ demand; (2) Procuring oil means doing business in dangerous and unpredictable places; (3) The cost of fossil fuels’ impact on climate change.
- Solar power companies stock price and value has long been on an upward trend because the technology improves rapidly and economies of scale develop so cost per watt falls and in some areas of good sun, there is near parity between solar and fossil fuel electricity, especially where the cost of emissions is considered.
- From a dozen good young stocks, the leaders are:
(1) First Solar: leading provider of third-generation "thin-film" solar cells & not dependent on perennially depleted silicon
(2) JA Solar: Chinese solar cell specialist
(3) SunPower: makes aesthetically attractive all-black solar cells, residential & commercial & is building new manufacturing plants in Malaysia to increase capacity
(4) Yingli Green Energy: vertically integrated Chinese producer of complete systems
- All four: strong charts today, recommended for growth-oriented investors (some risk)

From the wafer to the panel: A specialist's sector in a rapidly vertically integrating industry. (click to enlarge)

QUOTES
- Lutts: The fact is, the solar energy that hits the earth in one minute is sufficient to supply all our energy demands for an entire year; the trick is harnessing that energy.
- Lutts: These are growth investments of the first order. Every one of them is growing revenues at a triple-digit rate. (That's proven to be one of our most successful stock-picking criteria through the years.) Every one of them is a profitable company. And every one is being accumulated by institutional investors who want to get their foot in the door of the next big thing.