Last night while watching Office reruns, I realized I’d been remiss, and a lot’s had been happening in the public equities end of the cleantech sector. Not to mention yesterday’s billion dollar BK broiler announcement by the one-time Next Greatest Thing, Solyndra.
So, with my usual aplomb, I thought I’d simply peanut gallery what’s “Hot or Not” in cleantech.
Bled Out on the Operating Table
Solyndra – BK (and not the burger kind). Well, we wrote about it a lot, and nobody believes us. But bad product is bad product, and high cost is high cost, regardless of how much money you throw at it. So who’s going to calculate the impact on the DOE loan guarantee program’s projected loan losses? Not.
Evergreen Solar (NASDAQ:ESLR) - And it was such cool technology, too. I’m very sorry to see this one go. At one point some years back it was the savior deal of the sector. But we are in a race to cost down or die. Not.
Filed, Not Yet Hell for Leather
Enphase – I’m very very interested in seeing these guys make it. Lots of growth. Very thin margins so far. Product costs looks miserably high. Need to cost down like a banshee running from the Bill Murray. But you’ve got to love the category killer potential and how fast they’ve executed. First microinverter guy to manufacturing maturity eats the others like oatmeal (sloppy but eaten nonetheless). Hot.
Silver Spring – Hmmmmmmmmh. Home run potential, but what’s the term? Very high beta? These contracts are massive, far strung, very very tight margin. They’ve shown they can get the growth. But with long lead time sticky contracts, it’s about managing costs during slippage and change-orders well, and it’s a very competitive business. One blown contract gives back all the profits on the last 8. But, give kudos for getting this far and making it to be a real player. Now we’ll see if you can execute. Hot.
Luca Technologies – Hello? Are you serious? I read this S-1 cover to cover. I had my technologist read it and go find their patents. We love this area. The concept of microbes for in situ is old as can be, but very very interesting.. The challenge is always cost and performance (not really a new nutrient mix?). How do you get the bugs, nutrients, whatever you’re doing, down the hole and into the formation far enough and cheap and effectively enough to make a difference. But in the entire S-1 and website, there is not a single technology description, fact, proof point or ANYTHING that suggests they’ve actually cracked the real nut. The few numbers they do mention are not even to the ho-hum level. Did a real investment banker really sign up to this? Who wrote this? Their PR guy with a liberal arts studies degree? Really? This smacks of a “trust us I’m Jesus and daddy needs an exit” deal. In reality, probably interesting, but still very very very very very very very early science project. Not.
We have a whole collection of biofuels stocks to discuss now.
Solazyme (NASDAQ:SZYM) – half of its 52 week, less than a buck over its low. Not.
Kior (NASDAQ:KIOR) – Somebody correct me, but did the filings really indicate Khosla put money IN to this IPO? And it got off at low end of the range even after that? From one of their filings: ”In conjunction with the Issuer’s IPO, an entity affiliated with the Reporting Persons purchased 1,250,000 shares of Class A common stock, resulting in an increase in beneficial ownership by the Reporting Persons by that amount. The
purchase was made at the initial public offering price of $15.00 per share, for an aggregate purchase price of $18,750,000. The source of funds used to purchase the shares of Class A common stock was Khosla’s personal assets.” At least it’s money where it’s mouth is. Not.
Amyris (NASDAQ:AMRS) – 58% of its 52 week high, 20% over it’s low. Not.
Gevo (NASDAQ:GEVO) – 40% of its 52 week high, c. 20% off it’s low. Not.
Codexis (NASDAQ:CDXS) – 55% of its 52 week high, c. 20% off it’s lows. Not.
I’d comment on the fundamentals of each one, but I don’t want you to think I’m depressed. Oh, by the way. Did I ever tell you the story about the cleantech sector’s magically changing cellulosic biofuels business plans to “cellulosic bio-anything-but-fuels” plans as people finally woke up and realized how tough using lousy feedstocks and high cost processes in a commodities market actually is. Of course, careful you don’t change from targeting fuels to making feedstock for dirt cheap who would want to be in that business commodity chemicals or specialty chemicals with a global aggregate gross margin market less than your cash on balance sheet.
And a Few Tidbits
Advanced Energy (NASDAQ: AEIS) – I still really like this company. Somebody’s going to own inverters. And the numbers look very interesting. Very. Need to dig deeper. Hot.
American Superconductor (NASDAQ:AMSC) – Ummm. Do you believe their wind business ever recovers? One customer. Buying a competitor with one customer. Both in China. Customer doesn’t like single supplier risk where the supplier makes high margins? What did you think was going to happen? Ugly ugly story. Very real possibility that they trade on a log curve to straight zero. Some chance of sunshine, but I’d cancel the picnic. Not.
A123 (NASDAQ:AONE) – I really really really want this to work. But what’s the path to profits? Not feeling it. Not.
Tesla (NASDAQ:TSLA) - “Don’t worry, the NEXT car will fix my company’s fundamental problems” – quote attributed to the Tesla CEO who replaces the next Tesla CEO. Not.
Active Power (NASDAQ: ACPW) – Hey, did anyone notice these guys are growing revenues AND margins? A long haul, but keep it up! Need careful consideration before I’d jump into flywheels, but someone deserves a ton of credit as coach of the year. Hot.
Satcon (NASDAQ:SATC) - Hammered, but still a market leader. Got to think about this one – it’s historically traded for more than it’s fundamentals justified, but with PV Powered and Xantrex snapped up, hard to imagine they stay independent for long. Hot.
SunPower (NASDAQ:SPWR) - Wow. Total. No guts no glory. Highest cost producer, shall we call it the “performance queen”. I do like this bet by Total, but it takes guts. But when a market leader’s stock’s been hammered that far down somebody’s got to move and Total did . . . Whether an individual investor can play is another story. Hot.
Ascent Solar (NASDAQ:ASTI) – Holy star solar batman! These guys can sell ice to eskimos are have always been great R&D guys. Still maybe the highest cost CIGS process known to astronauts. I like these guys, but I’m not sure more cash fixes anything. Not.
Solon – What does “New US operational strategy” mean? It means solar is a game of scale and execution. Not.