Buffett Makes Second Solar Investment in a Month

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(Written by Alexander Crawford. Target price data sourced from Thomson/First Call (via Yahoo! Finance))

Warren Buffett just made his second sizeable investment in the US solar industry this month, adding more fuel to the debate over whether US solar is on the cusp of a comeback. Berkshire Hathaway’s MidAmerican Energy Holdings bought a 49% stake in NRG Energy Inc. (NRG)’s $1.8 billion Agua Caliente solar project. (via Bloomberg)

Last week Kapitall reported on Buffett’s first-ever investment in US solar, where MidAmerican Energy Holdings bought the $2 billion Topaz power plant from First Solar (FSLR).

Tax incentives were cited by analysts as one of the reasons for last week’s purchase. According to Jefferies analyst Gerard Reid, “tax credits for wind in the US expire at the end of next year, while solar ones run till 2015.”

Buffett’s most recent purchase may reflect the same thing, however according to analyst at Mizuho Securities Paul Clegg, Buffett’s foray into solar shows that utility-scale power plants offer good returns with little downside risk.

According to Bloomberg, competition from China has forced US solar companies such as First Solar to shift from selling panels to rooftop developers to building larger scale power plants.

Investing Ideas

Warren Buffett is one of the world’s most renowned investors – where he sees value, others follow. Do you think his investments will cause others to reevaluate the clean energy market?

To help you explore the market, we ran a screen on clean energy stocks for those trading well below their most pessimistic analyst target prices, possibly indicating that these stocks are undervalued.

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

List sorted by potential upside implied by target price.

1. Maxwell Technologies Inc. (MXWL): Develops, manufactures, and markets energy storage and power delivery products, and microelectronic products. Market cap of $425.04M. Of the 11 analysts that have set a target price on the stock, the lowest price target stands at $20.00. This implies a potential upside of 30.72% from current levels around $15.30.

2. Fluor Corporation (FLR): Provides engineering, procurement, construction, maintenance, and project management services worldwide. Market cap of $8.16B. Of the 20 analysts that have set a target price on the stock, the lowest price target stands at $61.00. This implies a potential upside of 26.37% from current levels around $48.27.

3. Newpark Resources Inc. (NR): Provides fluids management, waste disposal, and well site preparation products and services primarily to the oil and gas exploration and production industry. Market cap of $754.64M. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $10.00. This implies a potential upside of 24.38% from current levels around $8.04

4. Progressive Waste Solutions Ltd. (BIN): Operates as a vertically integrated waste management company in North America. Market cap of $2.25B. Of the 14 analysts that have set a target price on the stock, the lowest price target stands at $23.00. This implies a potential upside of 21.95% from current levels around $18.86.

5. Clean Energy Fuels Corp. (CLNE): Provides natural gas as an alternative fuel for vehicle fleets in the United States and Canada. Market cap of $832.13M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $14.00. This implies a potential upside of 21.11% from current levels around $11.56.

6. ABB Ltd. (ABB): Provides power and automation technologies for utility and industrial customers worldwide. Market cap of $41.18B. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $21.11. This implies a potential upside of 19.13% from current levels around $17.72.

7. Ashland Inc. (ASH): Operates as a specialty chemicals company in the United States and internationally. Market cap of $4.32B. Of the 10 analysts that have set a target price on the stock, the lowest price target stands at $65.00. This implies a potential upside of 18.59% from current levels around $54.81.

8. Waste Connections Inc. (WCN): Provides solid waste collection, transfer, disposal, and recycling services. Market cap of $3.58B. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $37.00. This implies a potential upside of 17.57% from current levels around $31.47.

9. Ameresco, Inc. (AMRC): Provides energy efficiency solutions for facilities in North America. Market cap of $532.89M. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $14.00. This implies a potential upside of 17.35% from current levels around $11.93.

10. Green Plains Renewable Energy, Inc. (GPRE): Engages in the production, marketing, and distribution of ethanol and related distillers grains in the United States. Market cap of $336.57M. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $12.00. This implies a potential upside of 16.73% from current levels around $10.28. 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , Technology


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