Recently I was attending an event where it was discussed for the new investment opportunities and challenges. We were all agreed that now it is the “Millennials” era and that we should set our focus on hi – tech companies. But, that what we didn’t mentioned, and I would like to share with you, because there are equal important are so called “green companies”. Why exactly them?
The first factor that globally concerns people is the global warming and climate changes caused by the emission of the carbon dioxide and so called greenhouse gases (sometimes abbreviated GHG) in the atmosphere. As result of the increased presence of these gasses, the global atmosphere temperature rise and has numerous negative effects and irreparable damages in the environment. According to the World Meteorological Organization of the United Nations (UN) projections for the rise of the global temperature are from 3 to 5 Celsius degrees and it overcomes the global target for limitation of the temperature rise of no more than 2 Celsius degrees.
The consequences of the global warming are: increasing temperature, ice melting at the polar sides on the Earth, weather disasters, floods, increased events of droughts and fires. All above enumerated events has huge impact over people health and cause extinction of many animal species. The public become more aware for this problem. Global warming is more and more important topic among world governments and many companies are striving to become more ecologically conscious or “green” companies.
What these would mean for the investors? In the United States of America the main topic of the discussions that are held toward climate changes is signing of the “New Green Deal”. If this deal is signed, undoubtedly there will be huge impact and changes in the American economy and improving of the social conditions of its people. The investors must know that a lot of opportunities will be open in front of them and they could use its money to invest in companies for “more green economy”.
Even and the contract didn’t signed, many countries become aware for the necessity of protecting the environment and leading the economy that leads to protection of the Earth. Even the investments for the green companies are the bigger ones, the future of the planet Earth is exactly in these companies that will have long range and sustainable development. New opportunities for the investors lay in the chances of finding the stocks and other securities that are already in the consent with the trend toward greener and healthier environment. Still trend to be “green” and to find concrete investments will require a little more work and thinking on the micro level.
In addition I’m singling out one company that deserves attention to be observed as investment opportunities and analysis.
Kenneth Ameduri, the editor in chief and co – founder of CrushTheStreet.com, internet page for finance and economical news, suggests lowering of the investments in traditional energy and communal sectors and to direct to the companies that are from the sectors of the renewable sources of energy. One of its choices is TerraForm Power. According to Motley Fool, company for investment counseling, TerraForm Power again is found on the list. TerraForm Power (TERP) is company with it’s headquartered in USA that works with production and distribution of the renewable energy sources through the solar and wind turbines. Last year company has increased its dividend after several years devoted to strengthening of the financial position. The company also makes promises that will increase its dividend from 5 % to 8 % till the end of the 2022. Results from the first quarter of TerraForm Power are proving its success, because its cash flow has increased for 30 % per stock during this year. In addition of the company is its recent purchasing of the Spanish Company for solar panels and wind turbines.
Technically speaking, several thing that are noticed suggest the following:
- On a daily Graph (Figure), DMI is very high. Historically speaking, there are no many values on the graph that could be read as higher and directs to the conclusion that the current trend is close to the pick,
- On a daily Graph (Figure) DMI perpetually is losing its strength,
- Regarding the fact that the stock earns 47, 36 % of its recent low level, correction could be in range from 10 -15 %.
Information that is presented on the Graph suggests of larger probability that the stock price will fall. I consider that it is better at first the market to correct its price and that will contributes for better enter and purchasing at a lower price.
Observing in a short term, stock price could increased a little bit more, but it should taking care on the RSI index that start to form divergence that shows potential changes in the direction of moving the price.
In the following graph there are presented the performances of TerraForm Power and Energy Sector SPDY Fund for the last 200 days. Even though in a relative strength and dynamic of the energy sector lags, the company price manages to grow significantly.
With the new legislation changes, that now allows private and legal subjects to invest in international financial market a lot of opportunities grow.
The thing that I like to stress out is that regarding where the investments are going to be in “green companies”, new industries or technologies, every investor should be conscious for its opportunities and to have bold definite strategy in advance in relation of the risk/profit. This will allows them to be active participants in the market on the long term. As Warren Buffett once said – “Price is what you pay, value is what you get”.