Energy in an Atom: The Atomics Index

There are significant investment opportunities in companies focused on renewable energy, the environment, conservation and pollution abatement.  To pursue the theme Crystal Equity Research has maintained a collection of company lists to aid investors in finding and following canny technology developers and strong producers.

The Atomics Index recognizes that the atom is a source of tremendous energy.  Energy from the sun is the result of the nuclei of atoms splitting or combining, converting matter to energy. We harness that mechanism to generate power in nuclear reactors.  Photovoltaic cells make the direct conversion of light into electricity through a photoelectric effect that causes certain materials to absorb photons of light and release electrons. When these free electrons are captured, an electric current is generated.  Most hydrogen is made from natural gas, but it is also possible to get hydrogen by snipping off electrons from plain water. 

It sounds so simple.  Yet companies trying to commercialize the science have plenty of challenges.  We consider the economic differences of all these “atomic” power sources in The Atomics Index.

Unlike previous updates that found many companies had gone out of business, this update found a number of acquisitions and mergers.  For example, SCANA Corporation had been worthwhile looking at for its interests in nuclear power generation.  After merging with Dominion Energy (D:  NYSE) investors are well advised to take a look at Dominion at least once to see what they did with SCANA’s operation.  Likewise, Vivent Solar was acquired by SunRun and Carmanah Technologies was bought by CMH Acquisition for a management buyout and privatization deal. 

McDermott bought Chicago Bridge and Iron to beef up its engineering and construction capacity in the energy industry, despite CB&I dust up with Westinghouse over cost overruns at a nuclear power plant.  Westinghouse had previously bought CB&I’s nuclear construction business.  Technology behemoth Alphabet, Inc. (GOOG:  NASDAQ) acquired Makani Power, signaling the recognition of the long-term potential in solar energy.   Residential solar system developer Real Goods Solar was folded into an online retailer, demonstrating the transition to a more mature sector focused on operational efficiency and not just on technology development. 

Finally, hydrogen producer and fuel cell developer Hydrogenics was acquired by Cummins (CMI:  NYSE).  Cummins move to boost its electrified power segments suggests that hydrogen is expected to have very important role in future renewable energy.  Hydrogenics uses electrolysis to produce hydrogen, distinguishing the company from the rest of hydrogen companies that reform natural gas or a biofuel.  In our classification scheme, those producers are included in the Beach Boys Index.

The forces of maturation could also be seen in several name changes as companies adjusted strategic focus.  XsunX became NovAccess Global and Envision Solar became BEAM Global. (BEEM:  Nasdaq). 

The news for The Atomics companies was not all good.  Transatomic Power, Inc. went out of business after discovering an error in its design to generate power by consuming nuclear waste.  In actions that were not perhaps so high profile, NanoSolar and Conergy went toes up as well.

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.