Friday, February 05, 2016

N-Viro Might Have Found a Gem in Waste

After ethanol producers figured out that pricey feedstock could rapidly erode profits, the renewable energy industry began casting about for alternative feedstock.  What is cheaper than ‘free?’  Waste of all kinds  -  sewage, mixed municipal trash, animal manure, food and agriculture waste, wood pulp, exhaust gases, steam  -  can be virtually free.  Sometimes waste generators are even willing to pay a fee to anyone willing to accept their nasty stuff.

Tuesday, February 02, 2016

CDTI: When Encouraging News is Not Enough

Last month Clean Diesel Technologies (CDTI:  Nasdaq) began shipping the latest innovation in its line of vehicle emissions control products to a new customer with assembly operations in China.  The diesel oxidation catalyst will be used by Panasonic Ecology Systems for products aimed at the retrofit market for heavy duty vehicles.  The relationship is expected to generate annual revenue in the ‘low single digits’ once ordering from Panasonic has ramped to full-rate by the end of 2016.  Responsible for Panasonic Group’s environmental systems, Panasonic Ecology Systems is an excellent customer.
The news seemed encouraging and stock bargain hunters might find attractive the low price quoted for CDTI.  We revisited Clean Diesel Technologies, a company that has long been listed in our Mothers of Invention Index of companies with innovative energy, efficiency and environmental technology.

Friday, January 29, 2016

Sirens of the Dividend


When the market gets volatile, many investors dive behind the protective shield of dividends.  Exelon Corporation (EXC:  NYSE) is an owner of nuclear power generation plants and is included in Crystal Equity Research’s Atomics Index of companies using the atom to create energy because more than half of its power output is generated at nuclear power plants.  The company offers a handsome dividend near $1.24 per year.  Granted it is not a small-cap company, which is the usual target for this column, but yield is beguiling.  At the current price the dividend yield is 4.6%, a level better than most bank rates and even some corporate bonds.

The trick to buying dividends is to seek the company with the most reliable cash flows and the stock with the best value.  There is a bit of friction in those two objectives as financially health companies that would be able to sustain a dividend payout would logically be valued higher than other less secure companies. 

Tuesday, January 26, 2016

Vanadium Vagaries

Last week the chief executive officer of Largo Resources Ltd., Mark Smith, made the rounds among investors in New York City to spread the word on the developing opportunities in the vanadium market.  Largo expects to benefit from a change in circumstances in China, which has been the undisputed largest producer of vanadium on the planet.

Image result for vanadium imageVanadium is a hard, silvery metal that is mostly used in strengthening steel.  Adjusting the mix to just one-tenth percent vanadium can double the tensile strength of steel.  China’s steel production has been significant source of demand for that country’s vanadium production, some of which was as a by-product of iron ore smelting.  Rebar for concrete reinforcement is a frequent end-use. 

However, when China producers figured out a new process to produce rebar without vanadium, demand shriveled for even domestic vanadium.  Some China vanadium producers shuttered their doors.  Unfortunately, China exports of the new rebar have been turned away by the European Union.  China is also instituting new rebar standards to elevate rebar quality for domestic use.  Smith and his colleagues at Largo Resources are confident it is only a matter of time before China rebar producers will be coming back to the market for vanadium.  What they will find is fewer producers and a shortage of available vanadium supplies.