Impressive Quarter for Alternative Energy Sector

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Ardour Global Index (Extra Liquid) Up 11% in 3Q '07; YOY Index Weighted Net Income Grows 233%

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The Industry is growing rapidly on a firm foundation, with alternative energy installations now powering well over 10 million households.

In the second quarter of this year, the Global Alternative Energy Industry, as represented by the Ardour Global Index (Extra Liquid) (Ticker: AGIXL), posted some impressive numbers, according to a new report issued by Ardour Global Indexes LLC.

Of the 30 companies in the AGIXL, 25 were profitable in the most recent quarter, with an index-weighted ROE of 18.6%. By weight, over 87% of the index was profitable. Also on an index weighted basis, year-on-year revenue growth (most recent quarter versus year ago quarter) was an impressive 83.8% and EBITDA growth 113.3%. Most impressive of all, year-on-year index weighted net income grew by 233.5%.

Although the trailing P/E ratio for the AGIXL is relatively high at 52.93, it is right in line with other more broadly based growth indexes, such as the Russell 2000 Growth Index, which showed a P/E of 52.94. These statistics seem all the more impressive when measured against the substantial order backlogs that many of the AGIXL constituents are sustaining.

Walter Nasdeo, Consulting Analyst to Ardour Global Indexes commented, “The Industry is growing rapidly on a firm foundation, with alternative energy installations now powering well over 10 million households.” Global solar installations have increased by a CAGR of 49.1% over the past six years to a total of 5748 MW and the EPIA is forecasting accelerated growth in the years ahead. Total wind capacity stands at 74,223 MW and the GWEC forecasts this to double by 2010.

Said Joseph LaCorte, Managing Member of Ardour Global Indexes LLC, “Alternative Energy is one of the only global industries where growth is often subject to government mandate.” In August, the US House of Representatives passed an energy bill containing a provision making it mandatory that 15% of electricity from private utilities be generated from solar, wind and other renewable energy sources by the year 2020. Currently, renewables account for just 0.2% of US power, indicating growth potential of well over 3,000% over the next fifteen years, if the bill is enacted into law. The European Union has established comparable mandatory guidelines, calling for a 20% renewable/conservation energy component by the year 2020. Without regulation, similar initiatives are underway in China, Australia, India and elsewhere.

Index Info:
Walter Nasdeo
Ardour Capital Investments, LLC

Joseph LaCorte, CFA
Ardour Global Indexes, LLC


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Joseph Lacorte

Walter Nasdeo
Ardour Capital Investments, LLC
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