Put Some Energy in Your Portfolio

It really is fun to look for exciting small companies in the stock market. No matter what the broader market is doing, there are always some growing companies that are capitalizing on a new industry trend.

As you know, I love to consider new investment themes. In this column, we’ve talked about the eye care industry as an attractive market sector in which to invest. We’ve also explored the pet care industry as one that is almost recession-proof. Both these industries still offer excellent prospects for individual investors.

After reading George’s commentary yesterday on The Price of Industrialization, I started thinking again about exploring the alternative energy market sector for investment opportunities. Although oil and gas won’t be dethroned for a long time, alternative energy production for home use is a growing industry. Personally, I would love to go “off grid” and generate my own energy for my home instead of relying on electricity delivered through power lines. In case of a blackout or catastrophe, I’d certainly have the means to survive independently.

Specifically, I’ve been looking into the solar industry. The wind power industry (both industrial and for home use) is actually growing faster than the solar energy industry, but investment opportunity in wind power is sparse.

In the solar energy industry, however, demand far exceeds supply. One small company that seems to be doing great is Evergreen Solar Inc., based in Marlboro, Massachusetts. This company manufactures solar power products using proprietary, “low-cost” manufacturing technologies. It makes solar products for electric utility customers, as well as wireless power for remote homes, water pumping, lighting, and rural electrification. The company’s solar power technologies are based on its proprietary “String Ribbon” manufacturing process.

In 2001, the company expanded its manufacturing capability by relocating its operations to a 56,250 square-foot facility in Marlboro, Massachusetts, where it constructed a new manufacturing line. Since its inception, the company has shipped over 50,000 solar panels for residential, commercial, and industrial applications in the United States and internationally. The company just can’t meet the demand for its solar panel products.

Evergreen Solar went public in late 2000, and its stock price suffered along with the rest of the market. The company seems to have found its stride now, however, and its stock chart is encouraging.

I believe the alternative energy market is bound to grow exponentially over the next two decades. It’s a little too early for fuel cells, but I don’t know anyone who wouldn’t want some form of solar panel on their roof.