Trimming Your Green Portfolio (Part 2 of 3) Verenium Corp. and Evergreen Solar Inc.
Submitted by EnergyTechStocks.com
With the stock market in the tank and a global recession setting in, even many major green energy developers are cutting plans for 2009. For smaller guys – including a number that EnergyTechStocks.com has positively written about – 2009 shapes up as a very difficult year.
For those wishing to trim their green portfolios, here are six companies which, even though their long-term potential still appears intact, look to be expendable at the present time, continuing with NASDAQ-traded Verenium Corp.
Verenium is still in a certifiably “hot” green energy sector – cellulosic ethanol, which is transportation fuel made not from edible foodstuffs like corn but from organic waste including garbage. Thanks to BP, which in August agreed to pay $90 million over the next several months for access to Verenium’s technology and facilities, the company should maintain a reasonably solid footing during the global recession.
But the Massachusetts-based company just reported a $133,242 third-quarter loss compared with $20,493 a year earlier. And while it said the quarter “demonstrated important progress,” it didn’t indicate that it expects to be in the black in coming months, even with BP’s financial support. Cellulosic ethanol, it would appear, looks too much like a future business in today’s economic climate.
Moving on to NASDAQ-traded Evergreen Solar Inc., the question is why own Evergreen in a down economy when there are bigger, stronger plays in the same sector? To be sure, solar energy could be hot in 2009 if President-elect Obama makes it a centerpiece of his new energy independence strategy. Having said that, how hot is solar really likely to be when, for example, California, a solar trailblazer, is in need of a federal handout just to pay its bills?
Evergreen recently reported a third quarter net loss of $23.8 million compared with a loss of $8.9 million a year earlier. The company’s expenses rose as it prepared to commence operations at a production facility. But that facility won’t begin shipping product until the first quarter of next year, and in its earnings press release, the company didn’t indicate when it expected to be in the black. As the economy has weakened, the weak solar players have too, leaving respected firms such as First Solar Inc. and Sunpower as investors’ preferred choices.
