I've picked 5 good firms; 5 bad. Who will do best?

| 2nd April 2010
Dan Box
Dan launches a highly unscientific experiment to track the financial fortunes of five green companies, and five less-than-green...

Lo, the time of reckoning is at hand; this week marks the end of the financial year, when the gains and losses of the past 12 months are calculated. Some finish up, some finish down.

A good time, then, to launch the inaugural The Ecologist Stock-Picking Smack-Down™. The game is simple. Take a portfolio of Green stocks and another portfolio of anti-Green corporate nasties (the kind we all love to hate). Then follow their success, measured by the share price, over the next 12 months and see how the two compare. Good versus evil, if you like.

Why? Two reasons. One; to test out whether it really is possible to make money while doing good? Is it in fact possible to make more money doing good than otherwise? Two; the environment needs long-term answers to long-term problems. Companies may offer some of these, but only if their business is itself sustainable. Share prices are one way to measure this.

Is the Smack-Down a reliable and balanced analysis? Certainly not. Is it more interesting than reading the FT? Almost certainly.

And things are already looking good on the side of the angels. New research shows global revenue from wind, solar and biofuels have defied the global economic collapse, leaping over 11 per cent in 2009, to $139 billion, compared to a 2.2 per cent fall in global GDP over the same year. (I know, I know, it seems biofuels aren’t actually very green after all.)

Sharp-suited market analysts at Bloomberg also predict spending on the sector will keep climbing. So, which green stocks to pick? These are my bellweather five to watch over the next 12 months:

Vestas: The world's No. 1 supplier of wind turbines in 2009, despite closing what was at the time Britain’s only plant for making them, on the Isle of Wight. The company’s 4th quarter earnings beat analysts’ predictions by a long chalk and the company is planning big things for 2010.
Share price (at the time of writing): 298.5kr

Ceres Power: This leading British fuel-cell producer stands to profit from the government’s new feed-in-tariffs, which will pay people for the electricity they produce from a fuel-cell at home. Potential competition from Japanese firms eyeing up the UK is a challenge but also confirms the market is worth fighting for.
Share price: 140p

Sitting pretty as China’s biggest solar panel maker, Suntech enjoys massive domestic demand and cheap supply and its recent results were ahead of analysts’ predictions. There’s a storm on the horizon with German demand expected to fall this year, but the company claims to have battened down the hatches in anticipation.
Share price: $14.13

Engyco: Yet to make a penny in either revenue or profits, Engyco hopes to raise up to €1 billion in the next couple of months, when it floats on the London Stock Exchange. Interest in green-tech companies took a hammering during the recession and the success – or otherwise – of this solar firm’s debut will signal the sector’s resilience.
Share price: (yet to float)

American Superconductor: At first glance not obviously green, but look again – all these other companies are generating power using strange and different means but someone needs to find a way to connect it all together. American Superconductor was chosen as supplier for the US’s first renewable energy hub and offers a host of other smart-grid related tech.
Share price: $27.86

My anti-Green five need little introduction:
Exxon: $66.54
BAE Systems: 380.8p
Lafarge: €52.33
Halliburton: $29.36
BHP: $78.59

Seconds out. Round one.

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