The stock market has had a rough five weeks since I introduced my annual Ten Clean Energy Stocks model portfolio on December 27th. My broad market benchmark (the iShares Russell 2000 index) is down 5.6% for the period. Clean energy stocks fared better, with the Powershares WilderHill Clean Energy ETF (NYSE:PBW) down only 0.5% as I write. My model portfolio of ten clean energy stocks is up 0.9% in local currency terms, but the weak Canadian dollar (down 3.5%) and Euro (down 1.5%) turned this into a US dollar decline of 1.0%.
In general the more speculative stocks performed better, but with much greater variation. The first six income stocks lost an average of 2% in US dollar terms, with a standard deviation of 3%. The next four growth stocks were flat on average, with a standard deviation of 8%. The two extra "speculative" picks performed speculatively, with one up 35%, and the other down 22%, for an average of 7%.
January has been fairly quiet for individual stocks in the portfolios, but where there has been significant news, I note it below.
Individual Stock Notes
(Current prices as of February 3rd, 2014. The "High Target" and "Low Target" represent the ranges within which I predicted these stocks would end the year, although I expect a minority will stray beyond these bands due to unanticipated events.)
Sustainable Infrastructure REIT Hannon Armstrong fell back to the low end of the range between my high and low targets after a quick run-up based in its big dividend increase in December. The only slightly negative news was an SEC filing in which the company stated that it had agreed to amend the terms of a portfolio loan to geothermal developer EnergySource LLC. The balance of the loan amounts to $11.8 million or 74¢ a share. If the loan were in default and there were no chance of recovering any of its value, a 74¢ decline would be justified. That's far from the case; a decline of around 5¢ a share seems more appropriate than the 85¢ decline we've seen. Hence, I have to attribute the vast majority of the pull-back to profit taking, and consider $13 an excellent entry point for anyone who does not already own the stock.
Green Building company PFB declared its regular 6¢ quarterly dividend to shareholders of record on February 14th. The company also continues to repurchase its own stock. It bought back 5,700 shares over the period. A board member and large shareholder, Edward Kernaghan, also bought 3,800 shares on the open market.
3. Capstone Infrastructure Corp (TSX:CSE. OTC:MCQPF)
Current Price: C$3.55. 12/26/2013 Price: C$3.55. Annual Yield: 8.5%. Low Target: C$3. High Target: C$5.
YTD Total C$ Return: 1.1% . YTD Total US$ Return: -2.4%
Capstone paid its regular quarterly dividend of C$0.075 on January 31st.
4. Primary Energy Recycling Corp (TSX:PRI, OTC:PENGF)
Current Price: C$5.00. 12/26/2013 Price: C$4.93. Annual Yield: 4.1%. Low Target: C$4. High Target: C$7.
YTD Total C$ Return: 1.4% . YTD Total US$ Return: -2.1%
I interviewed Primary Energy's CEO and wrote an in-depth article, which you can find here. I've also been adding to my position.
5. Accell Group (Amsterdam:ACCEL, OTC:ACGPF)
Current Price: €13.61. 12/26/2013 Price:€13.59. Annual Yield: 5.5%. Low Target: €11.5. High Target: €18.
YTD Total € Return: 0.1% . YTD Total US$ Return: -1.5%
Bicycle manufacturer and distributor Accell continues to rationalize its European operations. The company sold Hercules, one of its four German brands. Accell has owned Hercules for the last 20 years and will book a €3 million (€0.12) profit on the transaction.
6. New Flyer Industries (TSX:NFI, OTC:NFYEF)
Current Price: C$11.04. 12/26/2013 Price: C$10.57. Annual Yield: 5.1%. Low Target: C$8. High Target: C$16.
YTD Total C$ Return: 4.4% . YTD Total US$ Return: 0.8%.
Cannaccord Genuity upgraded bus manufacturer New Flyer to a "Buy," most likely in response to strong deliveries in the fourth quarter. The company reiterated a warning that 2014 margins would be weak due to expected deliveries on bus contracts signed during the very competitive pricing market of the financial crisis.