My Publisher Said I Was
Crazy When I Pitched Him
This Investment Idea
Crazy When I Pitched Him
This Investment Idea
But with government meddlers gone, competition and
innovation are driving rapid growth in this controversial industry
And one small Aussie firm is leading the charge with a
product that's 25% more effective than its competitors'
Invest now and you could see four times
your money in the next two years
innovation are driving rapid growth in this controversial industry
And one small Aussie firm is leading the charge with a
product that's 25% more effective than its competitors'
Invest now and you could see four times
your money in the next two years
By Kris Sayce
Dear Reader,
On Wednesday 3rd July riders in the Tour de France cycled 214.5 km from Abbeville to Rouen.
The journey took stage winner André Greipel, five hours, 18 minutes and 32 seconds.
As the cyclists approached the Normandy coastline, they passed the Fécamp wind farm.
The five wind turbines there, each 49 metres high with three 27 metre-long blades, can generate enough electricity to power 5,000 homes in the nearby town of the same name.
That's pretty impressive.
Trouble is, on that day, as the riders passed by barely a few hundred metres from the English Channel the air was still...not a single breath of wind.
And so, the windmills were still too.
It's a good job the 5,000 homes in Fécamp had another power source — the Penly nuclear power station, just 82 km northeast along the Normandy coastline.
The Penly nuclear power plant generates 2,764 megawatts of electricity. That's enough for the whole of Fécamp, with enough left over to supply 80% of all Normandy's electricity...around one million homes.
The problem for the two most popular renewable energy sources (wind and solar power) is neither can guarantee around-the-clock energy supply.
Both rely on the unreliable — the weather.
Windmills only spin when the wind blows; solar panels need clear sky and sun.
You're probably expecting me to recommend you invest in the nuclear energy industry...
But it's not nuclear energy I'm recommending today.
It's solar energy.
If you've read any of my articles and essays on energy, that might come as a surprise. I've given alternative energy a lot of stick in the past and warned people to stay away from investing in it.
So why have I suddenly changed my mind?
Well, I haven't.
You see my job first and foremost is to look for profit opportunities in the Aussie small-cap market — regardless of the industry. It doesn't matter what field a company is in, as long as I think it will deliver big gains for my readers.
I've never had a problem with alternative energy — I think it would be fantastic if we could generate all our electricity from clean, renewable sources.
What I have a problem with is the alternative energy industry.
I've been rubbishing it for so long because it looks terrible from an investment perspective.
But now things are changing...the sun is coming out
Recent developments in the solar industry have addressed many of its underlying problems. And it's opened up an investment opportunity that could make you a lot of money — provided you're comfortable with a little risk.
I believe that the solar energy industry is on the verge of a 360-degree turnaround. What was once a poorly run sector could soon become the major growth industry of this century.
Now, you may have noticed that since the withdrawal of government subsidies this year solar panel sales and company profits have plummeted.
This has led to investors fleeing the solar energy sector — driving share prices down to all-time lows.
Most people might see this as a bad thing, especially from an investment point of view.
But it's actually great news. Why?
Because when the government finally gets its nose OUT of industry, entrepreneurs can start doing what they do best: INNOVATE.
Of course, in the short-term the money that's been supporting the sector is gone, so prices of these stocks will inevitably fall...but if you're willing and smart enough to put a little punting money on the line, this presents you with a rare opportunity to pick up high-potential stocks at bargain prices.
And I've been researching one. A really good one. In fact...
Make a small, calculated punt on this firm now and
you could bank a 426% gain within the next two years
you could bank a 426% gain within the next two years
I've uncovered an Aussie renewable energy company that I believe will be the clear frontrunner once the solar market picks back up.
While other solar companies are wasting their time and money lobbying Canberra for the return of subsidies, this firm is out innovating and adapting to the new market conditions.
What makes me so bullish on this stock?
- It's uniquely positioned — with offices in Australia, Europe, and China this firm has got wide exposure to the largest solar energy markets in the world....
- A huge competitive edge — the company's about to acquire exclusive access to solar panels that are 25% more effective than any of their rivals...
- A great team at the helm — the guys at the top are smart and are quickly and effectively shifting the company's focus after the abrupt end of government subsidies...
I'll go into a little more detail on this deal in a moment.
The important thing for you to understand right now is that this company could be on the verge of a major growth phase.
And the fact that solar stocks as a whole have been bashed down means you have a chance to pick up these shares on the cheap. In fact, I reckon it's the best value-for-money stock on the entire ASX today.
Right now its shares trade for under 5 cents each...but if my analysis is correct this fast-growing Aussie firm could make you more than four times your money in as little as two years.
I'll tell you more about how I arrived at my valuation in a moment.
First let me explain why I think the solar industry is headed back up after being freed from the shackles of government price controls and a disastrous few years...
The cure for high prices...is high prices
My main beef with solar energy was that the industry was overpriced and the technology was inefficient.
When you're looking for a breakthrough technology, the idea should be that it's better than the thing it's designed to replace. On both a cost and efficiency basis, solar power didn't come close to fossil fuels.
But now that's changing...
On July 5th the Financial Times reported:
| 'General Electric has suffered a significant setback to its ambitions to develop a multibillion-dollar solar power business, delaying for at least 18 months the panel manufacturing plant the US industrial group had planned to build in Colorado... Construction has been halted at the factory. 'Danielle Merfeld, GE's general manager of solar technologies, said the group had been forced to delay the start of production because of the plunging price of solar panels, which have continued to decline steeply this year as a result of global overcapacity.' |
What's playing out in the solar panel industry is exactly the process Henry Hazlitt described in Man vs. The State:
| 'What governments never realise is that, so far as any individual commodity is concerned, the cure for high prices is high prices. High prices lead to economy in consumption and stimulate and increase production. Both of these results increase supply and tend to bring prices down again.' |
That all sounds very fancy. But what does it mean?
Well, for every major technology launch throughout history, the product or service is first priced at a premium. Think computers, cars, music players, televisions...and yes, electricity.
Prices start high because the new product or service is in limited supply. It's tapping into a new market where some consumers will pay a premium. If consumers won't pay the high price, it's up to the entrepreneur or his competitors to lower the price through competition.
That's where the market works its magic. You see, high prices are a signal to the market. It basically says to other entrepreneurs, 'Profits Here'.
This encourages others to compete with the new business, which means lower prices as these new firms scramble to grab market share. And as prices fall, more consumers can afford the product.
That's exactly what has happened over the last century.
Take TVs for instance. 10 years ago some friends of mine bought a 40 inch plasma TV for $10,000. I thought they were nuts paying that much for a TV, but some people are willing to pay more for the latest and greatest.
Since then more and more manufacturers have piled into the flat-screen TV sector, and companies have had to innovate to create better, cheaper products to attract customers to their individual brands.
If you had a big flat-screen TV a decade ago you were the envy of all your neighbours. Nowadays a 40 inch flat-screen is pretty much standard, if a little on the small side!
In fact just a few weeks ago I picked up a 40 inch LED TV for the bedroom — for $500. That would have been unthinkable ten years ago, but that's the power of competition when governments keep their big noses out of the way.
A solar future is closer than you think
Unfortunately, solar energy is one sector governments love to interfere with. And this interference disrupts normal market forces. So rather than the market weeding out the bad ideas and setting the price, the government decides which ideas to back and then imposes a price on the market.
It does this through subsidies to one or more industries, or by restricting access to the market. When governments subsidise an industry, there's no incentive for the industry to cut prices. So the price stays high.
This is exactly what happened to solar energy.
But to complicate things even further, rather than just giving subsidies to renewable energies, fossil fuel industries got subsidies too.
When everyone gets a handout it's hard to figure out the true health of an industry. This is one of the big reasons why the renewable energy sector isn't already much bigger. There was no incentive to cut prices.
But in the last few years things have changed. As the world economy slowed from 2008 and economies went into recession, governments started to cut back. One victim of the cuts was the solar industry.
The result was falling demand and a glut of supply. This can only lead to one thing — lower prices.
The cost of buying solar panels in Australia has fallen 65% since the end of 2009.
Take a look:
And it's not just here. In the UK it's fallen 50% in just over a year...
While the short term impact of this has been fewer sales, in the medium and long term the supply glut of solar panels and lower prices should result in real innovation.
And this is what pricks my ears. Because with innovation and real competition, companies finally have to start creating better, cheaper solar panels to attract customers.
That means more people will be able to afford them, increasing the market size and increasing profits for solar companies.
I like to think of it as a virtuous profit cycle. And you have the chance to hop on at the very start of it.
With a healthy, competitive solar industry there's no reason why solar panels can't become as common as TVs, and solar companies as profitable as big name TV manufacturers. In fact I wouldn't be surprised if nearly every Australian home had solar panels installed within the next decade.
Solar panels will soon pay for themselves in five years
This isn't some far-off dream either. With the average price of a system expected to drop from $6,400 to $4,400 by 2015, the time required to make back your initial investment will drop to just five years.
And as Clay Smolinski of Platinum Asset Management points out, 'We have evidence from other markets that when solar gets to that five year payback period demand absolutely explodes.'
Right now only 9% of Australian homes have solar panels installed. But if putting a solar panel on your roof becomes even half as common as picking out a big flat-screen for your living room, well-run solar companies stand to make a fortune — and early investors will be heavily rewarded.
That's why I'm backing the solar industry now — and I've found the one Aussie stock I believe is best placed to gain.
It's fallen 92% in less than five years... but I'm betting on it making a 426% comeback within the next two years.
This company is on the verge of a major deal that could benefit its business in two significant ways, which I'll tell you about in a moment.
If this deal comes off, I believe the stock price will jump four-fold — so it's important you act quickly.
Let me briefly explain.
The one deal that could see this 4¢ tiddler
trade for 20¢ or more within the next 2 years
trade for 20¢ or more within the next 2 years
Right now a merger is being proposed with a major US solar company.
This will give two significant strategic advantages to this Aussie firm.
- Firstly, it will open it up to a new customer base in the huge US solar market.
This year alone 3.3 gigawatts of solar panels are expected to be installed in the US. That's enough to power almost 2.5 million homes — or the equivalent of 6 coal-fired power stations. - Secondly, it will arm this firm with patented solar panel products and technology that it claims 'provides 25% more energy than other solar panels'.
It's already landed several big contracts, like a 5 megawatt order here in Australia and a $3.8 million solar project in the US — and the 'innovative technology' it's set to acquire from the merger will give it an valuable edge in a competitive and growing market.
Last year it made $162 million in revenues and $4.8 million in profit. Admittedly revenue was boosted by government subsidies for solar panel installations and high feed-in-tariffs from electricity retailers.
That's changed. But so has the company. Its focus is now on expanding the profitable commercial business here and overseas.
In 2010 95% of its business came from residential customers. By the end of last year that was down to 69%, and by the end of 2013 the company expects it to shrink to just 14% as the commercial and utility business grows.
What does that mean for you as an investor in this stock?
You could profit from a $200 billion
market that's set to double in eight years
market that's set to double in eight years
In short, the solar industry is on the way up.
According to the Bloomberg 'New Energy Finance 2011' report, annual spending on renewable energy projects is expected to increase from $200 billion today to $395 billion by 2020. And from 2021 to 2030, half of new renewable energy installations will be solar energy.
That means the market could almost double in eight years...
But you're not going to have to wait 8 years to see big profits from this investment. You won't even have to wait 5 years — because I'm predicting a triple-digit gain within 2 years for this Aussie solar company.
I'm confident the company can hit revenues above $200 million, and profits of $10 million plus in the next two years. Assuming a conservative price-to-earnings ratio of 10x for a growing sector, this would value the company at $100 million...or 426% above today's value.
In fact, if you look at the revenues of similar companies, $200 million is actually a very conservative estimate of what the company could achieve. I honestly wouldn't be surprised if it ended up making many more times your money than I'm currently predicting.
Look, I've got a lot more research on this company than I can go into here.
But if you'd like to know more about this firm — and how to invest — I'd be delighted to give you access to my full research today. Simply take a 30-day no obligation trial subscription of my investment newsletter, Australian Small-Cap Investigator.
How to make triple-digit profits in ANY market
You might find the scale of the opportunity I've been talking about hard to believe, especially in today's market. But the type of stocks that I spend my time uncovering and researching are proven to deliver triple digit gains — even during a bear market.
My name's Kris Sayce.
I'm a fully accredited advisor in shares, options and warrants, and I've been in the investment business for nearly two decades.
I use all the knowledge I've learned as a professional broker to help ordinary folk like you profit from the most speculative stocks on the planet: SMALL-CAP STOCKS.
Basically they're companies with tiny 'market capitalisations' — that means the total value of their shares is usually well under $100 million. That might seem like a lot but compared to companies like BHP and Rio with market caps of over $100 billion, they're miniscule.
The total value of a small-cap stock is so low, any moves it makes are magnified. It's not unusual for one of these stocks to move double-digits in less than a week — up or down.
I love small-cap stocks because I believe they're the only kinds of investments where Aussie investors can turn a few dollars into hundreds — maybe thousands — in short order.
Every month I send out my latest small-cap recommendation, along with an up-to-date analysis of the hottest small-caps on the market to a select group of investors through my newsletter, Australian Small-Cap Investigator.
Since I started Australian Small-Cap Investigator back in 2007, my readers have enjoyed some amazing results with 14 triple-digit winners and 17 double-digit gains.
My winning recommendations have made an average gain of +125.28% and my losing picks have made an average loss of -29%.
Overall the average gains are three and a half times the average loss.
That's an incredible strike record, as anyone will tell you.
Now I should point out, small-cap stocks are highly speculative and not the kind of thing you pour all your life savings into. You need to be aware that there's always the risk a stock could drop just as quickly as it rises.
But if you have some money to spare and you're willing to take a calculated risk, you could see some phenomenal profits from these high potential stocks.
Where else could you make
four times your money in two years?
four times your money in two years?
Take a 30-day no obligation trial of Australian Small-Cap Investigator now and I'll rush you...
| 1) | My latest issue of Australian Small-Cap Investigator, with the full details of how you could make four times your money or more from the shining light in the Aussie solar industry. You'll get a complete breakdown of what this company's doing and where I see it going. If my valuation is right you could be looking at 4 times your money if you buy in today. I'll also send you updates every week to bring you up-to-date on any market developments and share any important news on our open positions. |
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| 2) | FREE REPORT: SDSR: Sayce Dynamic Stock
Rating investors guide In this report I reveal everything I look for in a small-cap stock in precise detail, including a complete breakdown of how I determine whether any one stock is worth a punt. This is the strategy I began developing 17 years ago when I first entered the markets. It's a pretty lean and well-honed approach now. And it's yours to read and use as you see fit. |
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| 3) | FREE REPORT: How to Buy and Sell Shares For a Profit This short guide answers the most common questions beginners have about buying and selling shares. You'll learn how to place orders with your broker...which type of brokerage is right for you...the importance of using limit orders...how much to invest...and much more. |
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| 4) | FREE REPORT: 3 Ways to Manage Your Risk When You Buy Australian Stocks When you first invest in shares it's exciting. When your shares go up there's no better feeling. It's better than any thrill-ride. But there's one very important fact to remember: shares you've bought with your hard earned cash can go down as well as up. No matter how exciting the ride, you can also lose everything you've invested. In this report, you'll learn three easy risk management techniques that can reduce your exposure every time you invest. They won't eliminate the risk of losing money altogether. But they'll help a lot. |
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| 5) | FREE REPORT: Capital Gain and Cash to Boot: The Secrets of Spotting Small-Cap Value This manual will give you a grasp of the essential tools for evaluating any share...including P/E ratios, yield, net asset value, free cash flow and more. Plus it reveals many secrets behind my highly profitable share risk-rating system. Don't worry — you don't really need to know all of this. I'll do everything for you. But this just explains exactly how I go about my analysis. |
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| 6) | FREE REPORT: How Creative Destruction Works to Make Small-Cap Investors Rich Entrepreneurs don't create wealth by doing exactly what their competitors do. They do it by DESTROYING their competitors. They win in business by doing things differently. Not by doing the same thing. Based on my career and experience, I can promise you: finding creative destroyers early in their story is the best shot you'll get at making big money from the stock market. |
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| 7) | FREE REPORT: Five "Paradise Punts" for 2012 It's an exciting time to be scouring the lower reaches of the ASX. Right now some of Australia's most innovative small companies are trading for prices I haven't see since the lows of 2009. That's why I've put together this special report which lists my five top punts for 2012. |
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To begin your 30-day no obligation trial right now click here.
You'll go through to a secure order form page where you'll be asked to pay a small fee of $89 for the first year of my research. That's a 55% discount off the full publisher's price.
You'll have the next 30 days to look through the most recent issue of my newsletter, and the entire archive. You'll be able to browse my previous recommendations, as well as current open positions.
You don't have to invest a cent — you can simply just follow the progress of my recommendations. That way you'll get a clear idea of whether my share advisory service is for you before you commit any money.
If you decide you don't want to stay on as a subscriber to Australian Small-Cap Investigator, contact me within the next 30 days and I'll refund that subscription fee, in full.
But I hope you'll decide to stay with me. We're just at the beginning of this new phase in the solar story. With the government out of the way, entrepreneurs and innovators will soon start driving rapid growth in solar. There will be many opportunities for early investors to capitalise.
The solar stock I'm recommending today is one of the best — and cheapest — ways to access an industry that looks set to double over the next 8 years.
To read my full research on this high-potential Aussie solar firm right now, click here.
Best wishes,
Kris Sayce
Editor
Australian Small-Cap Investigator
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Calculating Your Future Returns: The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you've invested. While useful for detecting patterns the past is not a guide to future performance. Some figures contained in this report are forecasts and may not be a reliable indicator of future results. All advice is general advice and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment. All figures accurate as of 19/08/2012. Please read our Financial Services Guide Australian Small-Cap Investigator is published by Port Phillip Publishing Pty Ltd.
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