Green Investors Love EnerNoc, Hate Yingli


In an era of high energy prices, the most effective solutions are now the least glamorous ones. Ethanol, solar panels and wind energy all have their share of promise and problems. But a company like Enernoc — which helps utilities use traditional energies more efficiently — can offer more near-term, tangible benefits.

Or at least that seems to be what investors are thinking these days, as the market is reacting more favorably to energy efficiency than alternative energies.

Earlier this week, Yingli Green Energy said that demand for its solar cells caused revenue to double and net profit to triple in the second quarter. But concerns about rising polysilicon prices and a possible cut in Spain’s solar subsidies have caused the stock to fall nearly 20 percent since then. Blowout numbers simply aren’t good enough for solar investors right now.

Then came earnings from EnerNoc, the Boston-based company whose network reduces imbalances between supply and demand and helps utilities use power more efficiently. Six months ago, investors punished EnerNoc after it showed signs of a possible turnaround. Today, they seem more confident that the turnaround is underway.

EnerNoc’s stock rose as much as 29 percent Friday to change hands for $18.20, which seems a bit extreme considering the company posted a net loss of 54 cents a share, just three cents smaller than what analysts had been expecting. It also boosted its revenue outlook, but only slightly. The midpoint of the range it gave rose to $104 million from $102 million previously.

Enernoc’s future is looking encouraging, even it it isn’t expected to turn a profit until 2010. And it doesn’t face the kinds of obstacles (rising material costs, diminishing subsidies) confronting Yingli and other solar companies.

Even so, there seems to be a disconnect between this week’s performance of these two stocks. Perhaps investors are losing hope for the solar sector and looking for other opportunities. But it seems a little odd that the stock market is itself not very efficient right now in pricing stocks devoted to energy efficiency.


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