April showers fell on both the broad market and clean energy stocks last month, but my picks weathered the storm relatively well. My clean energy benchmark (PBW) was down 5.9 percent since the last update, and my broad market benchmark (IWM) fell 1.7 percent.
Meanwhile 10 Clean Energy Stocks for 2014 model portfolio also fell 1.7 percent. For the year so far, the clean energy benchmark is up 4.5 percent, having given back most of its large February gains, while the broad market is down 2.5 percent. My model portfolio is up 2.2 percent, having risen less than the benchmarks early in the year, but having given back much less over the last couple months. The six income oriented picks continue to outperform the four growth oriented picks (up 9 percent vs. down 8 percent), as is to be expected in this year's choppy market.
Performance details can be seen in the following chart and the stock notes below.
Individual Stock Notes
(Current prices as of May 2nd, 2014. The "High Target" and "Low Target" represent my December predictions of the ranges within which these stocks would end the year, barring extraordinary events.)
Sustainable Infrastructure REIT Hannon Armstrong fell in April as the market absorbed 5,750,000 additional shares of stock from a secondary offering priced at $13.00 at the end of the month, including the underwriters' full over-allotment option. The total raised was $74.75 million before deducting underwriting fees at a price slightly above the $12.50 IPO price from last year. Now that Hannon Armstrong has completed deployment of the funds raised in its IPO, secondary offerings will be necessary for the company to continue talking advantage of its many opportunities it has to invest in sustainable infrastructure projects.
This offering is accretive to current shareholders, since the company's book value per share was $9.22 in the most recent quarter, and this will raise the book value (and equity invested) to a bit more than $10 per share by my calculation. Since HASI is able to sustain a dividend of $0.88 per share using $9.20 in equity, they should be able to increase that to around $1 per share as they deploy the money over the next two quarters.
Considering that it took the company approximately a year to deploy the $167 million raised in the IPO, we should expect another secondary offering within six months.
2. PFB Corporation (TSX:PFB, OTC:PFBOF).
12/26/2013 Price: C$4.85. Low Target: C$4. High Target: C$6.
Annualized Dividend: C$0.24.
Current Price: C$5.75. YTD Total C$ Return: 19.8%. YTD Total US$ Return: 15.9%
Green building company PFB announced its 2013 results in March, but I neglected to cover them in the last update. Revenue and Funds From Operations recovered somewhat from the depressed levels in 2012, while earnings were boosted greatly by a one-time gain from a sale-leaseback transaction of PFB's buildings.
3. Capstone Infrastructure Corp (TSX:CSE. OTC:MCQPF).
12/26/2013 Price: C$4.05. Low Target: C$3. High Target: C$5.
Annualized Dividend: C$0.30.
Current Price: C$4.06. YTD Total C$ Return: 18.6% . YTD Total US$ Return: 14.6%
A number of analysts upgraded independent power producer Capstone Infrastructure's stock in response to the new power purchase agreement for its Cardinal plant which I wrote about last month. Four analysts now have a "Buy" rating on the stock, with three rating it "Hold." Their average price target is C$4.64.