Fisher Investments recognizes the alternative energy firm investment universe has expanded significantly in recent years. Investors can now invest in numerous alternative energy mutual funds (a.k.a. clean energy or renewable energy funds), individual pure-play renewable firms, or firms with alternative energy divisions.
However, Fisher Investments believes the investment universe of alternative energy firms is not well defined, as it's not classified as a singular industry. Instead, most alternative energy revenues come from divisions of much larger firms operating in several sectors. For example, Archer Daniels Midland—in the Consumer Staples sector—is currently America's largest producer of ethanol, but it makes the vast majority of its sales through oilseed processing and other traditional agricultural business segments. Firms operating nuclear power plants and renewable power plants are classified in the Utilities sector. Firms making technology and solar industry products typically fall in the Technology and Industrials sectors.
Additionally, Fisher Investments knows most pure-play alternative energy firms are too small for traditional investors, and many remain private. However, the publicly traded universe is growing. As of 2007, the 140 highest-valued publicly traded renewable energy firms were estimated to each have a market cap greater than $40 million and yielded a combined market capitalization of over $ 100 billion.*
While there are countless firms engaged in many types of alternative energy businesses, the investment universe is mainly concentrated among firms engaged in power generation-solar, wind, nuclear, and hydroelectric-and biofuels production.
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