With the arrival of Earth Day today, many investors might be asking how they can do the right thing for the planet and still make a good investment.
The analysts comprising Canaccord Adams' sustainability practice, of which I am a part, provided insight on four companies that do exactly that: exploit green markets and offer substantial upside potential, in their opinion.
Our research team believes the following four companies are leading beneficiaries of underlying trends focused on resource optimization and conservation:
Nalco (NLC: NYSE : $25.61 | BUY) capitalizes on climate change and water scarcity. I believe Nalco is fundamentally undervalued given powerful long-term secular global growth drivers including climate change and water scarcity. With a core competency in water treatment technology and an emerging presence in multi-pollutant air emission control, we continue to find the company uniquely positioned to benefit from an increasing focus on environmental impacts, while also providing critical productivity and process optimization solutions.
Rubicon Technology (RBCN : NASDAQ : $25.98 | BUY, Best Idea) is a leading supplier of materials required for the manufacture of energy-efficient LED lighting. My colleague, Jed Dorsheimer, who covers the company, says, "The company is a leading supplier of sapphire substrates to the LED market, with 25% market share based on our estimates. In our view, sapphire has become the clear bottleneck in the LED market based on the massive order trends over the past year of MOCVD tools, which is expected to continue."
NCI Building Systems (NCS : NYSE : $14.62 | BUY, Best Idea) is growing as a result of the shift toward green building practices in non-residential construction. Eric Prouty and Eric Glover cover NCI for Canaccord Adams and report, "We view NCI as an interesting play on the steady shift toward green building practices in nonresidential construction. Representing approximately 10-12% of all new nonresidential construction projects in the U.S., green building represents the most significant building movement today."
Newalta (NAL : TSX : C$8.89 | BUY) is a leader in waste management and recovery in Canada. Sara Elford, who covers the company for Canaccord Adams, says, "We continue to highlight Newalta Corporation as one of our top picks for 2010. Newalta is Canada's leading industrial waste management company, with a strategic focus on recovering products and recycling resources from industrial residues. On an annual basis, the company recovers roughly C$400 million worth of reusable products that would otherwise go to disposal."
Now for the fine print. Disclosure: Canaccord Adams is the business name used by certain subsidiaries of Canaccord Financial Inc., including Canaccord Adams Inc., Canaccord Adams Limited, and Canaccord Adams, a division of Canaccord Financial Ltd. The authoring analysts who are responsible for the preparation of this investment research are employed by
Canaccord Adams, a division of Canaccord Financial Ltd., a Canadian broker-dealer with principal offices located in Vancouver, Calgary, Toronto, Montreal or Canaccord Adams Inc., a US broker-dealer with principal offices located in Boston, New York, San Francisco and Houston or Canaccord Adams Ltd., a UK broker-dealer with principal offices located in London and Edinburgh (UK).
In the event that this is compendium investment research (covering six or more relevant issuers), Canaccord Adams and its affiliated companies may choose to provide specific disclosures of the subject companies by reference, as well as its policies and procedures regarding the dissemination of investment research. To access this material or for more information, please send a request to Canaccord Adams Research, Attn. Disclosures, P.O. Box 10337 Pacific Centre, 2200-609 Granville Street, Vancouver, BC, Canada V7Y 1H2 or firstname.lastname@example.org.
The authoring analysts who are responsible for the preparation of this investment research have received (or will receive) compensation based upon (among other factors) the Corporate Finance/Investment Banking Revenues and general profits of Canaccord Adams. However, such authoring analysts have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Corporate Finance/Investment Banking activities, or to recommendations contained in the investment research.
Canaccord Adams and its affiliated companies may have a Corporate Finance/Investment Banking or other relationship with a company that is the subject of this investment research and may trade in any of the designated investments mentioned herein either for their own account or the accounts of their customers, in good faith or in the normal course of market making. Accordingly, Canaccord Adams or their affiliated companies, principals or employees (other than the authoring analyst(s) who prepared this investment research) may at any time have a long or short position in any such designated investments, Related designated investments or in options, futures or other derivative instruments based thereon.
Some regulators require that a firm must establish, implement and make available a policy for managing conflicts of interest arising as a result of publication or distribution of investment research. This investment research has been prepared in accordance with Canaccord Adams' policy on managing conflicts of interest,and information barriers or firewalls have been used where appropriate. Canaccord Adams' policy is available upon request.
The information contained in this investment research has been compiled by Canaccord Adams from sources believed to be reliable, but (with the exception of the information about Canaccord Adams) no representation or warranty, express or implied, is made by Canaccord Adams, its affiliated companies or any other person as to its fairness, accuracy, completeness or correctness. Canaccord Adams has not independently verified the facts, assumptions, and estimates contained herein. All estimates, opinions and other information contained in this investment research constitute Canaccord Adams' judgement as of the date of this investment research, are subject to change without notice and are provided in good faith but without legal responsibility or liability. Canaccord Adams salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this investment research. Canaccord Adams' affiliates, proprietary trading desk, and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this investment research.