The electricity demand on the East Coast this July 6th reached levels that have not been surpassed since the summer of 2006. Fortunately, the power grid held up well, for the most part. The fact that the East Coast did not have any major blackouts could be due to the billions of dollars that the power companies have spent over this past decade in order to prepare for higher demand. Despite this, many people still doubt that they have done enough. Most experts agree that there is much more to do, and that more upgrades will probably be required. This is good news for investors, as it creates a lot of investment opportunities for them.
If investors are keen on tapping into the power grid sector in its entirety, a good bet is the First Trust NASDAQ ‘Clean Edge Smart Grid’ Infrastructure ETF. Here it is possible to invest in U.S. and foreign stocks, which are mainly related to energy management and storage, metering and devices, electric grids, and general technology in the energy grid sector. The stocks outlined below are components of the ETF, which is comprised of 32 stocks in total. Each of these investment opportunities have a market cap of $100 million or more, as well as at least a three-month average daily trading volume of $500,000.
EnerNOC (Nasdaq:ENOC). This is an energy management company, which provides services when there is a rise in the demand for energy. By monitoring the required energy levels, ENOC can help the companies demanding this energy. This stock has demonstrated to be a leader in the problematic market, after it hit a four-month high in July.
Quanta Services (NYSE:PWR). This is currently in fourth place out of the ETF holdings, and is an infrastructure play in the power grid sector. This firm installs, upgrades, repairs and provides maintenance to all types of power grids and the alternative energy sector, including solar and wind. This stock has been holding up better than the market overall.
SatCon Technology (Nasdaq:SATC). This one is the smallest stock, a real "micro-cap", because its market cap is only $211 million. This firm offers products to help convert the power that is generated from renewable energy sources into energy that can be used on today's power grids. The potential for high growth makes this speculative, low-priced stock worth betting on.
Power-One (Nasdaq:PWER). This company is a designer of power management solutions for the renewable energy sector, and a manufacturer of power conversion devices. In addition, the company works with the communication sector. One product it manufactures converts wind and solar energy into grid power, which can be readily used in commercial and residential buildings. The stock has gone through the roof in 2010, having increased by 75 percent by the beginning of July.
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