Is Canadian cleantech still an overlooked opportunity? Since 2009, the value of the sector has more than tripled, from just over $6-billion to more than $22-billion today. The TSX has become, some might be surprised to learn, the top exchange worldwide for cleantech, and its issuers have raised well over $2-billion since 2012.
Our cleantech has had its winners -Westport Innovations stands out as one company carving an international presence- but today many cleantechs maintain a lower profile. This is decidedly a good thing, as noisy flameouts in historically volatile sectors such as solar have done little to inspire investor confidence.
Instead, the TMX Clean Technology sector is now a nearly equal weighting of renewable energy, low impact materials and products, energy efficiency, waste reduction and water management, and renewable energy.
We count down this year’s top performing cleantech stocks. All TSX Cleantech Sector listed companies that began the year at more than ten cents were eligible.
1. Ballard Power (TSX:BLD) +67.7%
Closing Price December 31st: $1.61
Closing Price February 21st: $2.70
Byron Capital analyst Dev Bhangui says that throughout its history there have been problems with Ballard’s business model. Its focus on developing fuel stack to automobile OEMs, he says, was simply unsustainable because of the protracted timeline to commercialization. Selling to systems integrators didn’t work because the margins were too low. But Bhangui analyst says a recent shift in business model towards becoming a systems builder and solutions provider have moved Ballard up the fuel cell value chain. He says the effect on gross margins, which he believes are moving towards 30%, is dramatic considering the company’s gross margins just four years ago were close to 4%.
2. U.S. Geothermal (TSX:GTH) +50%
Closing Price December 31st: $.40
Closing Price February 21st: $.60
U.S. Geothermal continues to show progress at it geothermal power projects Oregon, Nevada and Idaho and is making progress at El Ceibillo, an advanced stage, geothermal prospect located near Guatemala City. After its recent Q4 results CEO Dennis Gilles was feeling bullish about the company’s prospects in 2014. “Our operating team has done an outstanding job this past quarter, particularly considering the unseasonably cold weather that each of our plants experienced during November and December,” he said. “Our units are all performing with high availabilities, and with output that is at or above what we had expected. As a result of this strong fourth quarter, we anticipate our year end to be well within the range of guidance provided earlier, and we look forward to excellent results for the coming year.”
3. Hydrogenics (TSX:HYG) +35%
Closing Price December 31st: $20.42
Closing Price February 21st: $27.78
Hydrogen energy pure-play Hydrogenics is capitalizing on industry trends such as the buildout of hydrogen refueling stations and the rapidly developing P2G, or Power to Gas energy storage market. The Mississauga-based company was recently awarded two contracts for fueling stations in the United Kingdom. CEO Darryl Wilson says worldwide hydrogen infrastructure spending is being spearheaded by Europe, Japan, Korea and California.
4. Alter NRG (TSX:NRG) +32.4%
Closing Price December 31st: $.77
Closing Price February 21st: $1.02
Plasma gasification player Alter NRG shored up its balance sheet earlier this month with a $5-million financing. Selective Asset Management’s Bob McWhirter says the company is one of his top picks, he thinks there is “a long opportunity” in the stock.
5. 5N Plus (TSX:VNP) +30.6%
Closing Price December 31st: $2.38
Closing Price February 21st: $3.11
Volatile commodity prices, such as those for Tellurium and Bismuth, have carved into 5N Plus’s margins, but the St. Laurent, Quebec-based company seems to have righted the ship after falling from 2011 highs of more than $9.00 a share. 5N Plus, which derives its name from the purity of its products, 99.999% (five nines), took off when the company, which produces essential components of thin-film solar modules, became a primary material supplier to American cleantech giant First Solar. When First Solar’s revenue was skyrocketing, it was being supplied cadmium telluride cells by 5N Plus.
6. Carmanah Technologies (TSX:CMH) +30%
Closing Price December 31st: $.15
Closing Price February 21st: $.195
Victoria-based Carmanah has seen a revolving door of management as its share price has slid since 2007. The company’s revenue, which once topped $60-million has fallen to less than half that, and the company has been awash in red ink. Carmanah’s recent third quarter revealed a loss of $1.4-million on revenue of $4.9-million. But new CEO John Simmons, for one, thinks the slide may be over. He recently bought the stock in the open market.
7. Dirtt Environmental Solutions (TSX:DRT) +29.8%
Closing Price December 31st: $2.55
Closing Price February 21st: $3.31
Founded in 2005, Calgary-based DIRTT, an acronym for ”Doing It Right This Time”, employs a 3D software platform to design and produce custom prefab interiors. The company compares its product to Lego in that its components connect using a repeated interface, but produce a unique result. Late in January, the company announced it had received letters of intent from clients in five different industries worth more than $12-million. “These wins reflect the growing recognition that DIRTT’s approach to building better is good for business in any sector, anywhere,” said CEO Mogens Smed.
8. BIOX (TSX:BX) +25%
Closing Price December 31st: $.40
Closing Price February 21st: $.50
The largest producer of biodiesel in Canada, BIOX’s proprietary production process has the capability to use a variety of feedstock, including recycled vegetable oils, agricultural seed oils, yellow greases and tallow. After its recent Q3 saw a bump in sales, CEO Kevin Norton talked about why the company chooses to focus on the Canadian market. “The fundamentals of the Canadian biodiesel market are becoming a key component of our addressable market,” he said. “The inter-terminal pipeline together with the supply agreement with Shell Canada Limited and the proposed 2 percent greener diesel mandate in Ontario provide a greater level of market certainty than the U.S. market.” With the proposed Ontario mandate expected to take effect April 1, 2014 and our established supply agreement with Shell we are in a strong position to take advantage of growing demand in our local market.”
9. Boralex (TSX:BLX) +21.3%
Closing Price December 31st: $10.82
Closing Price February 21st: $13.13
Boralex, which is headquartered in a small Quebec town called Kingsey Falls, was founded in 1982. The company, which was once a subsidiary of packaging and tissue products giant Cascades, built one of the first power stations in Québec to supply electricity to the Hydro-Québec grid. Today, the company owns and operates cogeneration and hydroelectric power plants. Last Friday, shares of Boralex jumped after the company announced it would begin paying a dividend in March.
10. Pure Technologies (TSX:PUR) +20.1%
Closing Price December 31st: $6.64
Closing Price February 21st: $7.98
Cantech Letter’s Canadian Cleantech Stock of the Year for 2013 has kept the party going in the new year. Pure is having success with products such as its Smart Ball, a free-swimming leak detection technology that was designed to operate in live large diameter water mains, which is being adopted by the oil and gas sector, a market that is much larger than water utilities.