The biofuel index has been updated to reflect the delisting of Aventine (AVR). Great Plains Renewable Holdings (GPRE) has been included in the index which still contains nine companies. Additional updates may be necessary if other index constituents decline futher in market cap or file for Chapter 11 (or its equivalent).
Archive for the ‘Indices’ Category
Camino’s Solar index has been updated effective January 30, 2009. Two companies, aleao solar (AS1.DE) and Solar-Fabrik (SFX.F) were removed due to their market cap declining below USD 100 million. Two companies, SMA Solar (S92.DE) and GT Solar (SOLR), passed all of Camino’s screens and were added to the index. The number of companies in the index remains at 31.
While 2008 reduced the number of renewable electricity companies passing Camino’s PurePlay screens, there are still sufficient companies to permit construction of a modified market cap weighted index. Effective January 30, Plutonic Power (PCC.TO) and Novera Energy (NVE.L) were removed from the index due to their market cap falling below USD 100 million. Two companies, Terna Energy (44T.SG) and Fersa Energia (FRS.MC) were added. The index continues to have 20 names with a combined market cap of USD 53 billion.
The Camino solar index has fallen 5.8 % since last Friday continuing its adjustment driven by concerns about slowing market demand. In addition to plunging 76% YTD, SOLAR is also the most volatile of the sustainable energy sectors we track and approximately twice as volatile as the S&P500:
Examining similar data shows that Renewable Generation, Fuel Cells, and LED & Lighting may have passed their peak volatility. Biofuels, like Solar, may not have started to decline.
A daily volatility tool has been added to the site for subscribers to access at PurePlay Indices>Daily volatility. Up-to-date plots can be created for the Camino Indices, broad market comparables, and selected sustainable mutual funds and ETFs.
Equities and commodities all fell during the week ending November 14th. US REITs were particularly hard hit (RWR -18.5%). For a complete summary visit our returns page.
Sustainable energy also fell sharply with only 10 companies in our indices advancing.
SOLAR has experienced continuted high volatile with a variety of downgrades occuring during the week. On Wednesday the index hit its 52 week low and closed the week down 74.5% YTD.
This huge adjustment has left the market cap of our SOLAR index shrinking to USD 33.4 billion from a peak of over USD 110 billion. Some of the US traded companies, Yingli (YGE), JA Solar (JASO), SolarFun (SOLF), Trina (TSL), and Canadian Solar (CSIQ), are trading below book value with trailing PE ratios ranging from 4.6 – 6.5.
These price levels reflect a very negative outlook for profitabilty and growth at the companies. The negative outlook is stemming from concerns about sales levels, margins, and negative currency exchange movements.
Some data is coming out allowing us to assess the current valuation levels. In its conference call this week JA Solar (JASO) reduced its sales forecast in 2009 to between USD 1.5 – 1.7 billion and EPS to USD 0.90. These numbers reflect a huge 75+% sales growth over expected 2008 sales of USD 849.5 – 878.9 million and a forward PE of 3.1 on Friday’s close. Sunpower also lowered its guidance for 2008 to EPS of USD 1.68, a forward PE of 15.2 on Friday’s close.
Mark has a long position in JASO.
All broader markets and commodities, except EAFA, ended the week down. Sustainable indices were generally up with the exception of LED & Lighting.
The LED & Lighting sector showed vulnerabilty to global economic conditions. Both Orion Energy Systems (OESX) and Rubicon Tehcnology (RBCN) reported third quarter results and both stocks fell sharply on the week dragging the sector down. Rubicon reported they expect a 4th quarter loss and Orioin expects 2009 sales to be about 15% lower than 2008. In both cases management noted softness in customer demand arising from economic conditions. Judging by investor response to these reports, this sector, which is down 64% since April 1, 2008, might have further to fall.
On October 31, 2008 Verasun (VSE) filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The filing was precipitated by the Company’s disastrous hedging transactions previously discussed here.
Camino does not include companies under bankruptcy protection in its indices and has adjusted the equal weight BIOFUEL index accordingly. Only nine biofuel companies remain in the index.
Effective October 21, 2008 the RELEC and SOLAR indices were updated and rebalanced. The recent steep declines in sustainable energy stocks (RELEC -58.7% YTD, SOLAR -63.5% YTD) has resulted in the removal of a number of companies from these two Modified Market Capitalization indices. The removals were partially offset by addition of several companies that pass all Camino’s index screens. For complete return information on the indices and a variety of comparables please visit our returns page.
The RELEC index includes wholesale producers of electricity, and their equipment suppliers, using renewable energy sources, currently bio-waste, biomass, geothermal, hydro, ocean, solar, and wind. Hanwei Energy Services Corporation (HE.TO), EarthFirst Canada Inc. (EF.TO), and Plambeck Neue Energien Ag (PNE3.DE) were removed from the index due to their market capitalization going below USD 100 million. EDP Renovaveis (EDPR.LS) was added. Currently 20 PurePlay(tm) companies headquarted in 11 countries are included in the index.
The SOLAR index includes companies pursuing business activities related to the end-use of solar energy by producing photovoltaics, conducting photovoltaic related activities, or producing end-use heat systems. Ascent Solar Technologies, Inc. (ASTI), Akeena Solar, Inc. (AKNS), Centrosolar AG (C3O.DE), Day4 Energy Inc. (DFE.TO), Solar Integrated Technologies, Inc. (SIT.L), and Sunways AG Koblenz (SWW.DE) were removed from the index due to their market capitalization going below USD 100 million. Motech Industries Inc. (6244.TWO) was added to the index. Currently 31 PurePlay(tm) companies headquarted in 9 countries are included in the index.
Returns for sustainable energy have been very negative this year and trailed broader markets. LED and Lighting has declined 61.7% since 4/1/08, Biofuels declined 74.9% YTD, and Fuel Cells have declined 70.3% YTD. For complete return information please visit our returns page. These declines have impacted the indices as described below.
Effective October 20, 2008 the LED and Lighting, Fuel Cell, and Biofuels equal weight indices have been updated. Due the the significant changes in market values described above, Camino has revised its thresholds for market capitalization for these indices. Until further notice the minimum market capitalizaiton to be included in an equal weight index is USD 50 million. With this rule modification the changes to the indices were:
- FCELL removed Ceramic Fuel Cells LTD (CFU.L) and added SFC Smart Fuel Cell AG (F3C.DE),
- LIGHT removed Arima Optoelectronics Corporation (6289.TW), and
- BIOFUEL removed Biopetrol Industries AG (B2I.DE), MGP Ingredients, Inc. (MGPI), Brasil Ecodiesel (ECOD3.SA), Schmack Biogas AG (SB1.DE), and BioFuel Energy Corp. (BIOF) and added Verenium Corporation (VRNM).
Companies were generally removed from the indices due to their market capitlization falling below USD 50 million.
The Solar index has been updated and rebalanced for a net gain of 2 companies to 36 constituents. Three companies were added: Solargiga Energy Holdings (0757.HK), Shenzhen Topraysolar Co., Ltd. (002218.SZ), and Solar Integrated Technologies, Inc. (SIT.L). One company, Spire Corporation (SPIR) was removed due to a decline in market capitalization.
The Renewable Electricity index has been updated and rebalanced. The index now contains 22 constituents reflecting the removal of Solar Millennium AG (S2M.DE) due to a decline in market capitalization.
The Biofuels index has been updated and rebalanced. The index now contains 14 constituents reflecting the removal of Nova Biosource Fuels, Inc. (NBF) due to a decline in market capitalization.
The Fuel Cell index has been rebalanced. There were no changes in constituents.
The LED-Lighting index has been rebalanced. There were no changes in constituents.