Obama Budget Proposes Big Increases for Spending on Clean Energy

Photo courtesy of KMBC.com

Photo courtesy of KMBC.com

President Barack Obama’s fiscal year 2014 budget proposal made headlines this week mainly for its changes to Social Security, but the increases proposed in US government support for clean energy spending did not go unnoticed. Reuters News Service called the increases for electric cars, wind power and other green technology “dramatic,” particularly because they arrive in the face of Republican criticism.

While many government agencies get slimmed down in the budget proposal, the Department of Energy would get an 8 percent increase to $28.4 billion next year, Reuters reported. Included are a 75 percent increase in spending on advanced vehicles to $575 million and a 29 percent increase in spending on the ongoing effort to integrate solar and wind power into the national electric grid, Reuters reported. Support for biofuels would increase by 24 percent.

“These increases in funding are significant and a testament to the importance of clean energy and innovation to the country’s economic future,” the Obama administration wrote in the budget proposal, according to the Reuters report.

While Republicans have criticized the US backing of companies like Solyndra, a solar panel maker that went bankrupt, and Fisker Automotive, a hybrid sports care maker which is struggling and laying off employees to hold off bankruptcy, President Obama has maintained that clean energy is a key to the country’s future.

Government support for the clean energy industry “has nearly doubled (the US) energy generation from wind, solar, geothermal and other renewable energy sources” since Obama took office in 2008 and maintaining this level of support “could lead to breakthroughs in the years to come,” Reuters reported.

We’ve been following several wind and solar energy companies, including:

Newbury Park, CA-based Sauer Energy (OTC: SENY, http://www.sauerenergy.com/) is a development stage company developing vertical axis wind turbines for commercial and residential uses. Formerly BCO Hydrocarbon Ltd., the company disposed of its oil and gas interests and in July 2010 purchased Sauer Energy and in May 2012 purchased Helix Wind Corp. Back on Dec. 24 it was trading for $0.24. It closed April 12 at $0.10, down 1 cent for the day. Its market cap is now $9 million and 52-week range is $0.08-$0.39.

China-based China Ming Yang Wind Power Group (NYSE: MY, http://www.mywind.com.cn/) is a wind turbine manufacturer focused on designing, manufacturing, selling and servicing megawatt-class wind turbines. Last July, MY announced it was considering a joint venture with China-based Huaneng Renewables Corp. to develop wind power and solar power projects in China and overseas markets. MY stock closed Dec. 24 at $1.21. It closed April 12 at $1.35, up 1 cent for the day. Its market cap is now $169 million and 52-week trading range is $1.06-$2.47.

Chatsworth, CA-based Capstone Turbine Co. (Nasdaq: CPST, http://www.capstoneturbine.com/) develops and markets microturbine technologies, including technologies used to provide on-site power generation for wind power. It closed Dec. 24 at $0.91 with a market cap of $278 million.CPST closed April 12 at $0.93, down 4 cents for the day. Its market cap is now 282 million and 52-week trading range is $0.73-$1.20.

San Mateo, CA-based SolarCity Corp. (Nasdaq: SCTY, http://www.solarcity.com) designs, installs and sells or leases solar energy systems to residential and commercial customers, as well as electric vehicle charging products.  It closed March 15 at $16.74 with a market cap of $406.5 million. SCTY closed April 12 at $19.97, down 41 cents for the day. Its market cap is now $1.5 billion and 52-week trading range is $9.20-$21.40.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, http://www.canadian-solar.com/ ), which sells a variety of solar products, closed back on March 15 at $3.50 with a market cap of $151 million. It closed April 12 at $4.07, down 3 cents with a market cap of $176 million. Its 52-week trading range is $1.95-$5.15.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, http://www.sunpowercorp.com/), which makes a wide variety of solar products and systems, closed back on March 15 at $11.80 with a market cap of $1.4 billion. SPWR closed April 12 at $11.06, up one cent for the day. Its market cap is now $1.8 billion and its 52-week trading range is $3.71-$13.88.

China-based Trina Solar Ltd. (NYSE: TSL, http://www.trinasolar.com/) designs, manufactures and sells photovoltaic modules worldwide. Back on March 15, TSL closed at $4.11 with a market cap of $291 million. It closed April 12 at $4.19, up one cent, with a  market cap of $335 million. Its 52-week trading range is now $2.04-$7.99. 

China-based Yingli Green Energy Holding Co. (NYSE: YGE, http://www.yinglisolar.com/) makes photovoltaic products including cells, modules and systems. YGE closed back on March 15 at $2.47 with a market cap of $387 million. It closed April 12 at $2.12, down 5 cents, with a market cap of $324 million. Its 52-week trading range is $1.25-$4.12.

China-based Suntech Power Holdings (NYSE: STP, http://am.suntech-power.com), the world’s largest producer of solar panels, closed at $0.70 back on March 15 with a market cap of $127 million. It closed April 12 at $ 2012, and then rose to $1.87 in early January, but has been falling since. STP closed March 15 at $0.75, udown 12 cents for the day, with a market cap of $135 million. Its 52-week trading range is $0.30-$2.96.

St. Peters, MO-based MEMC Electronic Materials (NYSE:WFR, http://www.memc.com) manufactures and sells silicon wafers and photovoltaic materials. Through SunEdison, it’s a developer of solar energy products. It closed March 15 at $4.53 with a market cap of $1 billion. WFR closed April 12 at $4.76, down 6 cents, with a market cap of $1 billion. Its 52-week trading range is $1.44-$5.70.

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New Years Resolution: Get Healthy? Maybe Nutraceuticals Belong In Your Portfolio

I recently had a routine physical exam; it was done in a clinic and I had to fill out a standard information sheet.  One of the questions related to medicines I take regularly.  Well, strictly speaking the answer is “none,” but doctors had advised me to take Flax Seed Oil, Vitamin B12, Folic Acid and Vitamin D, so I put those down.  Those are not medicines, but they are what is called nutraceuticals, AKA food supplements.  Nutraceuticals include the seeds from the female gingko biloba tree whose yellow cherrylike fruits fall on the sidewalks of New York in the late autumn and smell vaguely bathroom-ish (they are said to boost all kinds of bodily functions, including memory) — and nutraceuticals also are the basis of an enormous industry that accounts for billions of dollars annually in sales.  In fact the ingredients in nutraceuticals are projected to account for $24 billion in sales this year (http://nutraceuticalsworld.com/contents/view_breaking-news/2011-12-05/global-sales-for-nutraceutical-ingredients-to-reach-24-billion-by-2015/).  Those are essentially wholesale or industrial sales, and the retail sales would be several times that amount.

Algae Ponds in Kailua-Kona at Cyanotech

Some nutraceuticals have found the mainstream to the extent that they are considered staples instead of supplements.  That would include multivitamins certainly, and most recently some nonvitamins such as omega-3 oils (like my flax seed or the oils found in oily fish like salmon, tuna, sardines and mackerel).  Some regular foodstuffs have taken on the properties of nutraceuticals as well: chocolate, coffee, horseradish, red wine and all the juices and nuts that advertise themselves as antioxidants.  Those are NOT included in the nutraceutical figures quoted above, but they are part of the same trend.

Any category that includes gargantuan worldwide sales such as these ought to be happy hunting grounds for investors as well.  So we thought we’d take a look at some nutraceutical companies, to see whether there are some out there that are interesting.  In the past, a lot of vitamin and food-supplement companies were structured as multilevel marketing companies, and we have tried to avoid those because of the cloud of doubt that hangs over such schemes (they seem like chain letters or pyramid schemes).

Oslo-based Pronova BioPharma (www.pronova.com) might be a good place to start.  They actually straddle the nutraceutical and medicine markets, because it is their fish oil that is the principal ingredient in Lovaza (R), whose widely seen television commercial has virtually made it a household name.  Pronova is traded on the Oslo exchange under the ticker symbol PRON; there is an unsponsored ADR that trades on the Pink Sheets, but it settles in Oslo and in Norwegian Krone.  The shares closed at 6.53 NOK on Jan 26, which is about US$1.12.  Their market cap is 1.964 million NOK, or about US$337 million.  Volume was about 30,000 shares.  The US is an important market for Lovaza, so it could be that eventually Pronova will list its shares for trading here at some point.

Kailua-Kona, HI-based Cyanotech Corp (Nasdaq: CYAN; http://www.cyanotech.com/) is a cultivator and supplier of natural products, most notably Spirulina Pacifica, a refined algae nutraceutical product that is said to strengthen the immune system.  It is grown in shallow ponds adjacent to the Pacific Ocean in the 80-acre CYAN facility.  They are producing Spirulina at the rate of 350 tons per year, which is a lot of microscopic algae.  CYAN also produces BioAstin, an immune system booster and antioxidant that, among other things, supports skin health during sun exposure (seems appropriate for Hawaii).   For the quarter ended Sept 30, 2011, revenues were $6.0 million, up substantially from the year-earlier revenue for the same period of $3.8 million.  Net income was $0.16 per share, also nothing to sneeze at.  CYAN shares are trading at $6.44 vs a year-high of $9.36, on average volume of more than 50,000 shares per day.  The market cap is within reaching distance of $35 million.

San Marcos CA-based Natural Alternatives International Inc (Nasdaq: NAII; http://www.nai-online.com/) provides private-label manufacturing services for food supplement and vitamin companies.  It also sells its own products under its Pathway to Healing brand, primarily over the internet.  NAII products tablets, capsules, chewables, powders — a variety of ways of delivering nutraceutical products.  NAII recently announced litigation against some competitors, which could mean a combination of legal costs and potential awards: http://finance.yahoo.com/news/Natural-Alternatives-prnews-4218831226.html?x=0.  NAII shares are trading at $9.19 vs a 52-week high of $9.47, on relatively low daily volume of just over 20,000 shares.  The market cap is about $64 million.

Provo UT-based Nature’s Sunshine Products Inc (Nasdaq: NATR;   http://www.naturessunshine.com/) manufactures and markets nutritional and personal-care products: herbs, liquid herbs, vitamins and minerals in tablets and chewable tablets.  They also provide aloe vera gel, natural shampoos and toothpastes, and real range of homeopathic products.  Their market cap is $235 million, and the stock is selling for about $15.11 vs a high of $21.16 in the past year.  Volume is pretty good at 72,000 shares per day.  For the quarter ended September 30, 2011, sales were up nearly 6% to $91 million.  The quarter was a bottomline loser due to termination costs of a contractual relationship, but for the 9 months earnings including all charges & noncash items were about $10 million.

Salt Lake City-based Schiff Nutrition International Inc (NYSE: WNI; http://www.schiffnutrition.com/) manufactures and sells a variety of nutritional supplements, including products under the Tigers Milk brand.  For the 3 months ended November 30, 2011, sales were $61 millon vs $53 million in the year-earlier period, with EPS of $0.08 vs $0.06 the previous year.  The balance sheet is solid, with a current ratio of roughly 2:1.  The stock is selling for about $10.90 vs a high during the last 52 weeks of $13.02, on average daily volume of about 56,000 shares.  Market cap is about $320 million.

Another Norwegian entry in the Omega-3 race is Aker BioMarine (http://www.akerbiomarine.com/) , which trades on the Oslo exchange under the ticker AKBM.  Like Pronova, there is an unsponsored ADR that settles in Oslo in Krone, and it trades on the Pink Sheets.  Aker seems to have set its sights on a bigger potential market than the US, and has recently signed several deals with China for its omega-3 fish oils, which are known under the brand name Superba (also its Qrill fish meal and oils are meant for aquaculturists).  Smaller than Pronova, revenues are around 229 millon NOK for the first 9 months of 2011, and the year-end results are expected mid-February.  There are some corporate changes being implemented at Aker, which is now owned largely by Aker Seafood, and is in the process of merging with another supplier.  Have a look at their news flow to sort it out.

Please do your own research — we only write about companies we find interesting, and we make no recommendations.  None of these companies is a client, and we do not own any of the stocks.