Biofuel Companies Can Clean Up in the Clean Tech Space: A Wall Street Transcript Interview with Raymond James & Associates's Award Winning Expert Analyst Pavel Molchanov

Wall Street Transcript

67 WALL STREET, New York - February 27, 2014 - The Wall Street Transcript has just published its Alternative Energy & Utilities Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Outlook for Biofuels and Biochemicals - Asia Pacific Demand for Solar Energy - Grid Parity Timelines for Alternative Energy - Solar Energy Pricing - Government Subsidies and Regulation - Solar Growth Drivers and Headwinds - Regulatory Headwinds for U.S. Utilities

Companies include: EnerNOC, Inc. (ENOC), Advanced Energy Industries, In (AEIS), Chart Industries Inc. (GTLS), PetroChina Co. Ltd. (PTR) and many others.

In the following excerpt from the Alternative Energy & Utilities Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Which segment or segments of clean tech would you stay away from in 2014 and why?

Mr. Molchanov: I definitely would not think of clean tech as something where we can make a broad call on an entire industry. Clean tech is not an industry; it is a theme, and within that theme there are a variety of different industries. Solar is obviously very well-known, along with biofuels, wind and natural gas fuels, and some smaller areas like fuel cells and power storage as well. Within each of these areas there are distinct companies and different parts of the value chain, and I think it's important to take a differentiated perspective, so I would never say avoid every solar stock or conversely buy every solar stock. I really think people have to take an individualized perspective on the companies.

There are opportunities that I see in just about every area of clean tech, but on a selective basis. So for example, some of the best performers last year were solar stocks, and in the context of a bull market, sometimes high fliers can continue to fly high for a long time, but I would be pretty selective about going after solar.

One company that I like in solar that has not run away from investors is Advanced Energy Industries (AEIS), which makes inverters. This is a profitable company, free cash flow positive with a debt-free balance sheet. I think it's a very high-quality business, perhaps not as well-known as some of the pure solar companies, but I think it's a good way to play the solar space.

My only strong "buy" in clean tech is EnerNOC, which we talked about previously, and EnerNOC is really a one-of-a-kind company. It fits loosely into the smart grid category, but it doesn't manufacture any hardware; it does not make smart meters for instance. So it's a special situation, very intriguing story without any public competitors.

Within biofuels, I'd highlight Solazyme (SZYM). This is not really a fuel company in the sense that it's not targeting the fuel market right now, but it is a bioindustrial company. Solazyme uses an algae technology platform to produce various high-value bioindustrials, which includes things like solvents and specialty chemicals and even cosmetics, all using algae technology and with sugar as the raw material.

There may be an opportunity for Solazyme in the future to produce fuels, but right now they're focused on high-value, high-margin products outside of the fuel arena. Solazyme's name of the game in 2014 will be scale up with two plants, one in the United States and one in Brazil, coming on line very shortly.

TWST: Is there one more name that you'd like to highlight?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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