Value Trapped: Ten Clean Energy Stocks For 2015, April Update

My Ten Clean Energy Stocks for 2015 model portfolio held on to first quarter gains in April, despite a 29% fall for one of the stocks.  (For details on that decline, see the Power REIT (NYSE:PW) section below.)  The portfolio as a whole was rescued by the recovering Canadian Dollar and Euro, as well as mild advances for most of the other stocks across the board.  That includes a 4.9% gain for TransAlta Renewables (TSX:RNW, OTC:TRSWF), and a 5.8% gain for FutureFuel (NYSE:FF) which I singled out as having "fallen too far" in last month's update.

As a whole, the model portfolio fell 0.7% in April and is up 4.9% for the year to April 30th.  This compares to a 2.6% April decline for its broad market benchmark, IWM, which is down 3.7% year to date (YTD).

Income and Value Divergence

However, the overall averages are a product of the excellent performance of the six income stocks masking the miserable performance of the four value and growth stocks.  The income group was up 4.2% for April, and is up 14.6% YTD.  This compares to a 1.9% monthly gain and 3.7% year to date loss for its benchmark, JXI.  The fossil fuel free income portfolio I manage with Green Alpha Advisors, GAGEIP, is also doing well, with a 3.1% gain in April, and a YTD 8.6% gain.

In contrast, the four growth and value stocks lost 8.0% for the month, and are down 9.7% for the year.  This compares to their clean energy ETF benchmark (PBW), which rose 3.0% for the month and is up 9.3% for the year.

The chart below (click for larger version) gives details of individual stock performance, followed by a discussion of April news for each stock.

 

10 for 15 Performance
Chart

 

The low and high targets given below are my estimates of the range within which I expected each stock to finish 2015 when I compiled the list at the end of 2014.

Income Stocks

1. Hannon Armstrong Sustainable Infrastructure (NYSE:HASI)
12/31/2014 Price: $14.23.  Annual Dividend: $1.04.  Beta: 0.81.  Low Target: $13.50.  High Target: $17.  
4/30/2015 Price: $19.00. YTD Dividend: $0.26  YTD Total Return: 35.3%.

The stock of sustainable infrastructure financier and Real Estate Investment Trust Hannon Armstrong added to previous gains in April, despite a secondary share offering of 4 million shares priced at $18.50 a share.  The strength is most likely due to a well timed earnings guidance update for the first quarter released on April 28th.

2. General Cable Corp. (NYSE:BGC)
12/31/2014 Price: $14.90.  Annual Dividend: $0.72.  Beta: 1.54.  Low Target: $10.  High Target: $30.  
4/30/2015 Price: $16.31. YTD Dividend: $0.  YTD Total Return: 9.5%.

International manufacturer of electrical and fiber optic cable General Cable Corp. gave back some of its previous gains.  The gains come because of buyout rumors, discussed in the last update.  Although the reasons for a possible buyout are just as good as they were in March, this is typical performance for a stock after buyout rumors: The stock declines slowly as traders lose interest and move on to the next item in the news cycle.  The company will discuss first quarter earnings with analysts on May 7th.  Management is sure to be asked about the rumors at that time, although I doubt they will say anything to feed renewed speculative frenzy.

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