Monday, May 18, 2009

The Best Smart Grid Stocks

Many Americans probably heard the term "Smart Grid" before, but very few know exactly what it is. Basically the smart grid is a newly designed and eventually implemented electricity grid in the United States that will allow a more technologically advanced system of electricity distribution. It will allow individuals to save money by saving on their energy consumption, and increase the reliability and safety of the electricity distribution. With the smart grid, power is no longer centralized, and instead can be stored all over the grid itself.

So there are 2 ways to play such stocks. You can look at the smaller cap stocks which will play a larger role in the creation of the grid, or you can play the larger cap, well known stocks which are going to benefit greatly from the grid deployment, but don't have a business that is totally enveloped within the Grid's success or failure. Here are a couple of each:

Smaller Companies:
Itron, Inc (ITRI) - provides a portfolio of products and services to utilities for the energy and water markets throughout the world. The Company is a provider of metering, data collection and software, which can alert people to their energy consumption changes. Itron has two business segments: Itron North America and Actaris.

ComVerge (COMV) - Comverge, Inc. is a clean energy company providing demand management solutions in the form of peaking and base load capacity to electric utilities, grid operators and associated electricity markets.

Echelon Corporation (ELON) - Echelon Corporation develops, markets, and sells system and network infrastructure products that enable various devices, such as air conditioners, appliances, electricity meters, light switches, thermostats, and valves to be made smart and inter-connected.

Larger Caps:
Cisco (CSCO) - Cisco is known for it's internet router and network business. They predict the smart grid could be worth up to $20 billion a year for 5 years for their industry.

Intel (INTC) - Intel is the world largest computer chip maker. Any grid technology out there will without a doubt need smart, innovative new computer ships in mass quantity.

Investing in these smart grid companies as well as others may not give you instant returns, but if your time horizon is 4-7 years or so, they should pay off nicely. I recommend diversifying among them all.

1 comment:

Saverio B. said...

How about:

Name: American Superconductor Corporation
Symbol: AMSC


Name: CenterPoint Energy
Symbol: CNP

They are listed here as a "smart grid stock".

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