Ten Clean Energy Stocks: Valeo February Update

I’m trying something different and doing quick updates on individual stocks in my 10 Clean Energy Stocks model portfolio as I have the time to write them. The portfolio as a whole has been accelerating with the instant torque of an electric vehicle this year (details here.) I thought I’d start with the company that’s newest to my readers.

valeo logo

Valeo SA (FR.PAVLEEF)

12/31/18 Price: €25.21/$28.20.Annual Dividend: €1.25. Expected 2019 dividend: €1.25.  03/4/19 price: €29.13/$33.00.YTD gain: 15.5% Euro/ 12.8% USD.

I added this stock to the portfolio because it has great technology and improving market share, but weak industry growth and overoptimistic management projections in 2018 led the stock to get massively beaten down. Despite the horrible year, the company was still profitable and paid a healthy dividend, with a respectable 5% yield compared to its beaten-down stock price.

This meets the profile of one of my favorite types of stocks: a profitable growth company that got a bit ahead of itself when times were good, and with a stock that suffered deeply as a consequence when growth investors abandoned the stock.

Some of my past picks of this type are Mix Telematics (MIXT), and General Cable (BGC). The Mix was a bet that took 3 years to pay off (it was in the list in 2015, 2016, and 2017, but it is now trading well above where I first entered the stock, and readers who added to their positions in 2016 and early 2017 are looking at 400% gains). Readers who bought General Cable when I added it to the list in 2015 also had to wait almost two years, but saw it double when the company was bought out at the end of 2017. Although the payoffs took 2-3 years in both cases, investors were being paid to wait with 4-8% dividends in the meantime.

More recently Seaspan Worldwide Preferred shares (SSW-PG in 2017) and common shares (SSW in 2018) both paid off (33% and 24% respectively) over the same years in which I picked them. In this year’s list, Green Plains Partners (GPP) and Covanta Holding (CVA) also fit that profile. These first entered the portfolio in 2016 and 2017, respectively. The stock prices are down 1% over three years and up 7% over two, but they have both been reliable dividend payers the whole time.

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Disclosure: Long VLEEF, MIXT, SSW-PG, SSW.

Disclaimer: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the ...

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