Within the ‘clean tech’ sectors, Ryan Reiber tries to ‘home in on companies’ that have what he perceives as good business models for future growth.
Investor
Ryan Reiber
Occupation
Consultant
Portfolio
Includes shares in Canadian Solar Inc., SolarCity Corp., Tesla Motors Inc., EnerNOC Inc., Opower Inc. and Brookfield Renewable Energy Partners LP.
The investor
Ryan Reiber is an environmental consultant and writer. As a result of his work experience and university studies, he has gained a good understanding of the "clean tech" industries. Because of this "specialized knowledge," he is mostly interested in stocks from these sectors. Having a portfolio emphasizing environmentally friendly companies can be a volatile ride. But Mr. Reiber is young and has a high tolerance for risk. He believes in looking past the short-term fluctuations and keeping his eye on the long-term potential.
How he invests
Within the "clean tech" sectors, Mr. Reiber tries to "home in on companies" that have what he perceives as good business models for future growth. The companies also need to have "a solid history of meeting quarterly targets, like Tesla Motors."
"Having said that, I try to balance my portfolio so that I have some solid value investments as well," he adds. "I look for stocks that have been pushed downward excessively by macroeconomic forces."
A case in point currently is solar stocks. "The drop in oil prices seems to have had a negative impact on them, even though very little electricity is produced using oil in North America. And the price of natural gas – a competitor for solar power – is not tied to oil prices like it is in Asia."
"Canadian Solar is an industry leader in terms of sales and earnings growth, as well as return on investment and profit margins. Yet it has the lowest price-to-earnings ratio among its competitors."
In addition to low oil prices, its stock has been hit by other events, such as the European Union and United States imposing tariffs on solar panels. "But Solar Power has other things going for it, such as a good foothold in Canada and Japan [the latter is becoming a major source of demand for solar panels]."
The company is also diversifying into residential solar power and introducing new products, such as a battery-storage system. This should "help fuel future growth," Mr. Reiber believes.
Best move
"Buying Tesla in April of this year before its stock price took off."
Worst move
"It was holding onto Plug Power for too long in March, 2014. Its stock price appreciated more than it should have, and then fell off a cliff after an analyst's report. I should have been more skeptical, but was caught off guard."
Advice
"Always be skeptical and make sure you understand a stock's fundamentals before investing. Also, don't be too focused on short-term results."
Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com or his Website.