At a press briefing in midtown Manhattan yesterday, Richard Driehaus, chairman and CIO of Driehaus Capital Management, strongly endorsed the alternative energy sector, an opinion that runs counter to some other leading industry authorities.
The prosperity of alternative energy stocks at large can be specifically attributed to high oil prices and those prices are only moving up, Driehaus said. In the two weeks since Hurricane Katrina, for instance, the PowerShares WilderHill Clean Energy Portfolio exchange-traded fund, is up by 58%, The Wall Street Journal reported yesterday. Katrina, however, is not entirely responsible for the spike, as the energy ETF was up by 35% in the three months before the hurricane's landfall, the WSJ noted.
But Driehaus likes securities linked to alternative energy and environmentally conscious and renewable energy sources such as wind, solar and hydrogen fuel cells. He believes they'll remain the hot pick for the near future.
"Supply and demand make energy a long-term play," he said.
But not everyone in the industry has so much faith in alt-energy. As the WSJ report reveals, many are convinced that the alt-energy surge is a temporary reaction to Katrina.
"It's dangerous to invest in funds that have recently spiked," said Dan Culloton, a Morningstar analyst. "They could do the same thing to you on the way down."
Maurice Schoenwald, whose New Alternative Fund has been investing in alt-energy companies for more than 20 years, said, "Alternative energy is going to happen, but it isn't going to happen overnight.
Imari Love, an international analyst at Driehaus, said his sector remains robust. Japan, China and Mexico are performing well for the Chicago-based firm, while Germany is particularly attractive due to the fact that the property market is accelerating.
"If you are an investor, and are not investing internationally, then you are making a big mistake," he said.
Closer to home, Brian Nelson, a domestic analyst at Driehaus, likes technology.
"It's a tough market, but good opportunities still exist," he said.
According to Nelson's research, automated meter reading, the advanced television market and GPS are the leading securities. The potential for growth in these areas can be attributed to their constant advancement.
"GPS is invading our lives," he added.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.