An older investment theme that’s done well over the last 18 months is alternative energy. Now, this investment theme covers a lot of companies and a lot of new technology.
Domestic solar energy stocks are still hot, but not as hot as they used to be. Two new China stocks recently listed on U.S. stock exchanges: Trina Solar Ltd. (NYSE/TSL) and Solarfun Power Holdings Co. Ltd. (NASDAQ/SOLF). Both of these stocks are super hot and making a lot of money for stockholders. Not surprisingly, both are super-high-risk, expensive stocks.
One company stands out, however, as a top wealth creator over the last two years. It was first mentioned in this column when the stock was trading well below $10 per share.
Fuel-Tech Inc. (NASDAQ/FTEK) is one of the hottest alternative energy stocks out there. This company isn’t in the energy production business. It’s in the business of cleaning up the energy production business.
Fuel-Tech develops specialized technologies for air pollution control. The company focuses on the worldwide marketing and sale of products for nitrogen oxide (NOx) reduction. The company’s proprietary NOx reduction technologies include the “NOxOUT,” “NOxOUT CASCADE,” and “NOxOUT” catalytic reduction processes, which reduce NOx emissions from boilers, incinerators, furnaces, and other stationary combustion sources.
The company also operates a “FUEL CHEM” business that uses chemical processes for slagging, corrosion control, and plume abatement in furnaces and boilers through the addition of chemicals into the fuel. The company was founded in 1987 in the Netherlands, and it maintains a U.S. head office in Stamford, Connecticut.
Part of the company’s operating success has been its sales to Chinese industry. Most of the company’s stock price success has been due to its Chinese business strategy. In that country, people often walk the streets surrounded by clouds of toxic exhaust. Industry is growing so fast and without much in the way of pollution control that smog is an enormous problem.
Of course, Fuel-Tech has the right products at the right time. Now trading close to $30 per share, the stock is expensive. It’s likely, however, that this stock will remain expensive because it’s a great company selling great products that are in great demand.