California's power crisis is helping to revive alternative-energy stocks, most of which soared, then crashed last year with the general technology sector.
But analysts warn that the companies, which are involved in solar cells, fuel cells, micro-turbines and other alternative power-generation systems for businesses and homes, don't offer a quick fix for California's woes or for higher oil and natural gas prices that are weighing on the economy overall.
Moreover, few of the firms are making money--one of the reasons investors abandoned the shares last year. But that hasn't stopped some investors from rushing back into the stocks in recent weeks.
Fuel-cell developer Plug Power Inc. (ticker symbol: PLUG) jumped $4.38 to $31.38 on Thursday, a 16.2% gain that left it up 114% this year. Rival FuelCell Energy (FCEL) gained $3.75 to $72.50.
Chatsworth-based mini-turbine maker Capstone Turbine (CPST) rose $6.06, or 18.6%, to $38.63, boosted partly by a "buy" rating from Salomon Smith Barney, which put a $50 price target on the stock. The shares are up 38% this year.
Other gainers Thursday included fuel-cell maker H Power (HPOW), up $1.88 to $9.81; flywheel manufacturer Active Power (ACPW), up $2.75 to $26.75; and solar panel maker Evergreen Solar (ESLR), up 6 cents to $11.56.
Trading volume for stocks of many alternative-energy companies has been heavier in the first part of January than in the entire second half of 2000, according to research firm BigTrends.com.
The interest in these stocks has mostly come from small investors, money managers said.
"This is the kind of thing that retail brokers just love," said Donald Coxe, strategist at Harris Investment Management, which manages $12.5 billion in assets. "But it's not my kind of [investment]. I own companies that have earnings."
One company that is already profitable is AstroPower (APWR), a solar cell and panel maker. It rose 88 cents to $39.38 on Thursday.
"It is well-placed to take advantage of the power problems because it has not only sold its products for a couple of years, but has also been actively marketing in California," said James Logerfo, analyst at Banc of America Securities.
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Shares of alternative-energy companies such as Plug Power and FuelCell Energy have resurged in recent weeks amid California's deepening power crisis.
Source: Bloomberg News