Greentech ventures have had an interesting couple of years. In 2008, many of the emerging technologies were lauded as the answer both to our declining competitive edge and to our mounting fossil fuel issues. Then, it seemed a directional shift occurred. Companies were struggling to make the technologies more affordable and billions in infused venture capital dollars failed to deliver profits. Now, nearly three years after the height of enthusiasm, many green-tech ventures are being looked at in the past rather than as the future, prompting sales and sagging stock prices. Below are three green-tech companies it may be wise to short.
First Solar (FSLR)
Top managers at First Solar Inc. have been petering out of the company for some time; an indication according to Kynikos hedgefund manager,JamesChanos, that First Solar’s best days are behind them. The environmental benefits of solar have been disputed somewhat, but what has been largely troublesome for the companies, is the inability to create competitive pricing. Shares of first solar tend to fluctuate, for instance, yesterday when it was announced that Germany would discontinue its pursuit of nuclear power, but for the most part, investors seem tired of waiting for solar power to become competitive
Chanos, said the solar panel maker and alternative energy in general, would not create the jobs promised several years ago. More and more it does appear to be the case that major investors are losing their faith. Sean Parker, former facebook President and partner in the Founder’s Fund, essentially described many of the venture capital companies in a recent article on IPO’s and overall enthusiasm seems to have waned.
Vestas Wind Systems (VWS)
Vestas Wind Systems, like First Solar is among the premier in its field. Vestas is the largest wind-turbine manufacturer internationally, but since Chanos recommended betting against the stock, Vestas slid more than 6 percent. Attributing the drop entirely to Chanos though, seems to ignore that sentiment about this stock is on the decline. Wind energy in general, outside of some enthusiasm toward it after the nuclear catastrophe in Japan, has been losing steam. The stock is currently trading at its lowest level in close to five years. It fell 18 percent last year. In spite of the bearish sentiment though, Vestas is anticipated to meet its 2011 forecasts for revenue and margins according to Matrix Investment Management Ltd in a note. The company has already secured enough orders for delivery and commissioning in 2011 to meet 95 percent of its target of 6,000 megawatts of shipments that underpin its financial forecasts. This could result in a bump in shares around earnings; however, for the most part people seem to be losing interest.
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