Maybe 2005 - 2006, in retrospect, will have signaled the beginning of the solar boom and be remembered in the history books as the "Dawn of the Solar Age".

Booming Renewable Energy Stocks

J. Peter Lynch

Booming Renewable Energy Stocks 2005-06
Maybe 2005 - 2006, in retrospect, will have signaled the beginning of the solar boom and be remembered in the history books as the "Dawn of the Solar Age".
Booming Renewable Energy Stocks 2005 - 2006
by J. Peter Lynch

For the most part 2005 and early 2006 have been a lackluster period for the majority of U.S. common stocks. The market mostly went sideways to nowhere and was generally an unusually boring period for investors.

But quietly in the background, 2005 may also have been the beginning of a trend of more and more solar related companies becoming public companies and as a result the solar industry gaining a much "brighter" profile with the American investing public.

Below is a comparison of 2005 and year to date 2006 performance of 7 solar related public companies and one exchange-traded fund (ETF) that trade on major US markets verses a number of other indices that are commonly used in the financial press for comparisons.

These companies and the ETF are listed in alphabetical order and followed by their stock market trading symbol:

Distributed Energy Systems Corporation - DESC
Daystar Technologies, Inc. - DSTI
Energy Conversion Devices, Inc. - ENER
Evergreen Solar Inc. - ESLR
Powershares Wilderhill Clean Energy Fund - PBW
Spire Corporation - SPIR
Sunpower Corporation - SPWR
Suntech Power Holdings ADR - STP

Commonly Followed Indexes vs Renewable Energy Stocks

 

 

01/01/2005 to 12/31/2005

2006 YTD

 

Current Value

$ Change

% Change

$ Change

% Change

 

 

 

 

 

 

DESC

5.64

$5.08

203.20%

$-1.94

-25.59%

DSTI

11.86

$6.50

228.07%

$2.51

26.84%

ENER

50.46

$21.43

110.92%

$9.71

23.83%

ESLR

12.47

$6.28

143.71%

$1.82

17.09%

PBW

22.25

$2.64

19.48%

$6.06

37.43%

SPWR

36.39

$8.55

33.61%

$2.40

7.06%

STP

32.79

$6.65

32.28%

$5.54

20.33%

S&P 500 Equal Weight

1751.11

$100.47

6.45%

$92.02

5.55%

S&P 500

1291.24

$36.37

3.00%

$42.95

3.44%

Dow Jones

11380.99

$-65.51

-0.61%

$663.49

6.19%

NASDAQ

2243.78

$29.88

1.37%

$38.46

1.74%

As you can see from the table, there was nothing "lackluster" about solar related stocks in 2005 and early 2006. They clearly and substantially outperformed all the comparative indices. Admittedly there are only a small number of stocks and they are almost totally focused in the Photovoltaics sector of the industry, but it is certainly a beginning and a "stellar" beginning at that.

Their growth has slowed in the first quarter of 2006 and at the present time most of the stocks in the solar sector are undergoing a price correction, after having advanced for so long, this is a normal corrective phase and should lead to better entry points in many stocks.

Hopefully this superior stock performance will generate a greater awareness on the part of the American public of renewable technologies and thereafter more positive action and attention directed at the most critical topics of our lifetime:

  1. Global Warming
  2. Our insane and growing dependence on foreign oil, and
  3. The creation of a long term plan for the transition of the current fossil fuel based American economy to a renewable energy based one.

Maybe 2005 - 2006, in retrospect, will have signaled the beginning of the solar boom and be remembered in the history books as the "Dawn of the Solar Age". I certainly hope so.

J. Peter Lynch has worked, for 29 years as a Wall Street analyst, an independent equity analyst and private investor, and a merchant banker in small emerging technology companies. He has been actively involved in following developments in the renewable energy sector since 1977and is regarded as an expert in this area. He is currently a financial and technology consultant to a number of companies, among them, DaystarTechnologies, Inc. which is listed in the accompanying table. He can be reached via e-mail at Solarjpl@aol.com

 

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