"Like many, I'm concerned about global warming and my latest stock recommendation is a company that is actually trying to do something about it," notes Yola Edwards, a technical analyst with Internet Wealth Builder, in her review of E.I. DuPont De Nemours & Co. (NYSE:DD) --- which she calls a "pioneer in embracing its social responsibilities."
Edwards notes, "The company -- which offers a wide range of innovative products and services for markets that include agriculture and food, building and construction, communications, and transportation -- exemplifies the fact that environmentally-friendly alternatives have their benefits for global preservation and contribute to a company's bottom line."
In the mid-1980s, she recalls, DuPont studied data which indicated that CFC refrigerants were destroying the Earth's protective ozone layer and company officials proceeded to create successful businesses by selling substitutes.
She explains, "In 1994, company officials committed to cutting gas emissions by 40% by the year 2000 from its 1990 levels. Meeting its 2000 target, DuPont went on to set a 65% reduction goal by 2010, but has already met that target and now uses 7% less energy than in 1990 despite producing 30% more goods.
"DuPont has reduced greenhouse gas emissions by more than 70% since 1991, while realizing more than $3 billion through energy conservation. Additionally, DuPont has for the most part replaced natural gas with methane from landfills in its industrial boilers."
She also points to the company's involvement in a biomass program to produce a chemical from corn called Bio-PDO which, to quote a press release, "consumes 40% less energy and reduces greenhouse gas emissions by 20% versus petroleum based PDO." The resulting emission reductions, she notes, can be viewed as the equivalent of removing 22,000 cars from the road. DuPont is also working with BP PLC to develop other forms of biofuel.
She adds, "In a further effort to reach its goal of generating 10% of its total energy needs from renewable resources by 2010, DuPont Canada is assessing turbines as a renewable energy source. Analysts say that the solar energy market is growing by about 30% per year and DuPont is there, supplying the industry with eight out of ten primary materials needed to manufacture photovoltaics modules which convert sunlight to electricity."
Importantly, she favors the stock not only because of its social responsibility, but because of its financial performance, She says, "DuPont's productivity improvements continue to add to the bottom line. Company officials announced recently that 2006 earnings grew 23% to $2.88 per share from the prior year and they expect 2007 earnings growth to continue with an earnings outlook of $3.15 per share."
Technically, she adds, over the past six years the stock has been range-bound with an average price of about $45 with $5 - $6 spikes on either side of that level. And while a technical pullback to $49 "may be in order", she suggests, the longer-term consolidation may be nearing an end and any pullback should be viewed as a buying opporutnity.
The technician notes, "Since September 2006, the stock's monthly chart indicates higher highs and higher lows, with progressively higher monthly closes. "Since March 2005, the stock has been forming a saucer bottom and a monthly close above $54 would indicate an upside breakout. Once the breakout occurs the pattern's technical measurement suggests a potential target of about $69.50 over the ensuing year."
Steven Halpern's TheStockAdvisors.com provides a free, daily overview of the latest stock ideas from the nation's leading financial newsletters.
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