Minyanville's Sean Udall dares to share the kind of keen insight and actionable information you won't find in any prospectus. Here he answers a reader's burning question about "green" stocks. For more original thought, visit www.minyanville.com.
Professor Udall,
Do you have any opinions on Zoltek Companies, Inc. (NASDAQ: ZOLT)? My wife wants me to buy everything "green". Her last "green" company idea was General Electric (NYSE: GE). I know, right? I bought a little just to quiet the noise level. I'm into a little SunPower (NASDAQ: SPWR) and Evergreen Solar (NASDAQ: ESLR). Does Zoltek have legs?
Thanks,
Minyan L.
Minyan L.,
First, that's hysterical. Second, a word of caution: Going all green, or all of any one thing, is something I'd never advocate. If you do, you do so at your own risk, as nothing in the market is ever as obvious as it seems, especially when it seems totally obvious.
As for Zoltek, I've always had a hard time getting my arms around the volatility that is this company. I invest in and trade many stocks with high to very high volatility, but the way Zoltek trades has never struck a cord with me.
Additionally, with respect to high beta, I tend to like companies with cash-rich (preferably net cash) balance sheets and volatile Zoltek isn't sporting that big green stockpile.
In my opinion, the highest quality solar plays are Cypress Semiconductor (NYSE: CY)/SunPower, Trina Solar (NYSE: TSL) and Suntech (NYSE: STP). Evergreen Solar is my flyer as it will need capital, but I believe it's for viable reasons.
I currently favor solar over wind from a longer-term thematic standpoint, but that doesn't mean I don't see the wind thesis and think longingly about the American Superconductor (NASDAQ: AMSC) shares I owned not too many months ago.
If you're looking specifically for wind plays, you may want to investigate Thomas & Betts (NYSE: TNB). It's a well valued stock that's trading way off highs.
Sean
Position in TSL, ESLR
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