Chinese EV and off road vehicle manufacturer Kandi Technologies climbed 88 percent for a total gain of 108 percent for the year on the renewal of Chinese EV subsidies in September. I had re-purchased a trading stake in the $4 range which I sold in the low $7 range shortly after the subsidies were announced. As the stock continued to climb into the $9 range, I sold some $10 calls, which I expect to hold until they expire in December. Kandi is currently trading at $7.91.
Waste Management (NYSE:WM)
Waste Management is up 4 percent for the period and 28 percent for the year.
Six Alternative Clean Energy Stocks
New Flyer Industries (TSX:NFI, OTC:NFYEF)
Transit bus maker New Flyer lost 2 percent for the period and is up 25 percent for the year. The company is integrating the parts businesses acquired from Orion and NABI, and expectsstrong growth as transit customers refurbish rapidly aging fleets.
This evening (Oct 15th) New Flyer announced its new orders and backlog for the third quarter. Deliveries increased 49 percent year on year to 577 equivalent units (EU) (articulated buses count for two EUs) while adding significantly to its backlong with firm orders and options for a net 1,931 EUs, after the expiration of unexercised options.
LSB Industries (NYSE:LXU)
Chemicals and Climate control conglomerate LSB Industries advanced 9 percent for the period but is down 6 percent for the year. The company had temporarily poor earnings in the first two quarters because of repairs and upgrades at two of its chemical plants, although its climate control business was strong. I expect insurance recoveries and better capacity utilization will lead to much stronger results in Q3 and Q4, as well as next year.
Maxwell Technologies (NASD:MXWL)
Ultracapacitor maker Maxwell Technologies briefly rallied in September when analysts at Piper Jaffray got confused by the announcement of subsidies for Plug-in Hybrid (PHEV) buses in China (to which Maxwell has insignificant exposure,) and mistook them for the expected subsidies for hybrid (HEV) buses. Since PHEVs are much more expensive than HEVs, the subsidies were much larger than the Piper Jaffray analysts expected, and they raised their price target from $8 to $13.50, only to drop it back to $8 the next day when they realized their mistake.
Readers of my blog were not fooled, but many traders were, and the stock shot up over $10 before Piper Jaffray reversed their mistake.
It is very hard to predict Chinese policy, but the fact that the expected HEV subsidies have not yet been announced should be worrying to Maxwell investors. These subsidies were first expected months ago. China's stated policy for the EV subsidies was to drive the development of new technology, as opposed to subsidizing the roll-out of established technology. It's all about reading tea-leaves, but I'm beginning to think there is a real chance that subsidies for hybrid buses may not be renewed at all.
If they are renewed, the lack of subsidies in the third quarter will mean that Maxwell's earnings (to be announced next week) are likely to be even worse than I thought a couple months ago, and the lack of subsidy renewal is now eating into fourth quarter earnings as well. I've increased my short position based on this reasoning.
Maxwell lost 6 percent for the period but is up 2 percent for the year.
Power REIT (NYSE:PW)
Railroad and solar Real Estate Investment Trust Power REIT received some subtle but positive results in their ongoing civil case to foreclose on their railroad lease with Norfolk Southern Corporation (NYSE:NSC) and its sub-lessee Wheeling and Lake Erie (WLE). A new judge has replaced the previous judge in the civil action. In his first ruling, this judge dismissed NSC and WLE's attempts to get much of the evidence excluded from the case in a long ruling detailing many flaws in their argument where a single-line ruling would have been sufficient. I believe that the judge was sending them a message not to delay the case with frivolous arguments. They seem to have gotten the memo, and refrained from another possible motion which had little chance of success, but would have delayed the case by 2-3 months.
Power REIT advanced 4 percent for the period but is down 14 percent year to date.
Disclosure: Long WFI, LIME, PFB, HASI, ACCEL, FVR, AXY, WM, NFI, LXU, AMRC, PW, HTM, RPG. Short: MXWL, KNDI, ZOLT.
DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results. This article contains the current opinions of the author and such opinions are subject to change without notice. This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
This article was originally published on AltEnergy Stocks and was republished with permission.
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