Sustainable Energy
Projected annual growth is 10% and 14%, respectively, for global wind and solar; 23% for domestic smart grid technology. Wind has no technology risks and is easily financed by third parties, says Robinson, whose pure play pick is Danish wind company Vestis. At home, he likes American Superconductor (NASDAQ: AMSC), which makes the superconductivity wire being used to help connect the U.S.'s three regional grids. It also sells wind turbine components used in 10% of the world's wind turbines.
Resource Efficiency
Winslow sees the $86 billion U.S. scrap recycling industry growing 11% a year, with e-waste (electronics) recycling growing at 21%. A Robinson favorite is Schnitzer Steel (NASDAQ: SCHN), which recycles scrap metal from cars that's shipped to overseas markets. It's also helping regulators develop a way to recycle plastic in cars. Robinson, who thinks it's fairly priced, likes its strong balance sheet and cash flow. Asia's rising demand for steel should help it weather another potential U.S. recession, he says.
Green Transportation
Finding pure plays is currently challenging, but for now the $1 billion lithium-ion battery market-projected to grow 39% a year-is a good avenue, says Robinson. "There are hundreds of companies trying to develop the holy grail of lithium batteries ... There's going to be huge consolidation and it's not going to be pretty. We don't know who the winner will be, but we're being very careful." He likes France's Saft Groupe, SA, which has partnered with Johnson Controls to develop lithium-ion batteries for Ford Motor Co.
Winslow is also playing the sector through Wabtec Corp. (NYSE: WAB) which makes mechanical components for freight and passenger trains.
Environmental Services
The biotechnology waste and treatment products subcategories are projected to grow at just 3% and 8% a year, but this sector is an essential part of the green picture. Robinson recently visited Newalta Corp., Canada's leading waste management and environmental services company (TSX: NAL). "It's probably one of the better values," says Robinson, who is impressed by its battery recycling plant and the other ways it's helping companies of all shapes and sizes deal with their varied waste streams. It also pays a small dividend.