Introducing The ‘Wise Energy Use’ Stock Index (Part 1 of 5) – Lighting Firms Philips, Cree, Lighting Science
Submitted by EnergyTechStocks.com
Try as you might, you won’t find an exchange-traded or mutual fund that targets “smart energy” companies whose technologies and products serve to reduce energy costs. And yet, in the wake of the Wall Street meltdown, every company and household can be expected to put a higher priority on saving money by saving energy. So we’ve created “The EnergyTechStocks.com Wise Energy Use Index.” We haven’t run it through a whole bunch of financial filters, so think of this as an informal index, your starting point for creating your own “wise energy use” stock portfolio, beginning with:
Three companies likely to be at or near the top of the light-emitting diode (LED) business: Philips, Cree Inc. and Lighting Science Group.
Although many have only recently replaced their incandescent light bulbs with energy-efficient compact fluorescent lights (CFLs), before long CFLs will be replaced by LEDs, which are even more energy efficient. In addition, LEDs don’t have the mercury disposal problem that comes with CFLs.
The LED lighting business is forecast to skyrocket. According to Merriman Curhan Ford, an investment banking firm heavily involved in alternative energy, the LED market could hit $3 billion over the next three to five years, up from $600 million in 2008.
Changing a light bulb is probably the easiest, most cost-effective way to lower energy costs. Lighting represents roughly 30% to 40% of a commercial building’s energy consumption. In addition, commercial buildings spend a pretty penny on lighting maintenance. Because LEDs are virtually maintenance-free, they’re already starting to catch on in a big way in the commercial real estate sector.
Typical of the “Wise Energy Use” companies we have chosen to highlight, there are big companies (in this case, Philips) whose successes in LED lighting will be muted by the scope of their other operations. Then there are smaller, more speculative outfits – Cree and, even more so, Lighting Science – where the potential payoff is enhanced by the prospect that they could be acquired by a giant like Philips. Indeed, having already bought a number of companies similar to Cree, some analysts wouldn’t be surprised to see Philips also buy Cree, though there’s no reason to believe any deal is close at hand.
Lighting Science is part of an intriguing-sounding pilot test of LED street lights for New York City. One would think that if the company passes the test, a big market for its products could open up
