SolarCity (SCTY) has been one of the hottest alternative energy stocks since its Initial Public Offering five short months ago. Yesterday it shot up 24% in one day, on the largest one-day volume since it opened, in anticipation of its quarterly earnings release. It is up 95% in the past three months, and has more than tripled from its initial trading price. As of this writing SCTY has given back about a third of yesterday’s stratospheric gains.

Now that earnings have been released, let’s take a grounded-in-reality look at this innovative solar company.

SolarCity’s earnings results were mixed, showing steady revenues, but also a net loss for the first quarter of 2013 (chart above). It’s disconcerting that net income has been negative for the past four quarters, and on a per share basis, the most recent losses were 28% greater than analyst expectations. Revenues, on the other hand, came in ahead of analyst estimates, but just barely.

If SolarCity is to make it as a company, it needs to successfully implement a business plan that grows its customer base in a big way. It therefore makes sense to look at data relating to its clients. The chart below shows data for each of the past four years, and compares it to the most recent quarter.

Customer growth remains robust for the first quarter of 2013. 2012 was off the charts, with SolarCity adding on 30,950 new clients. The first three months of 2013 added close to a quarter of that number, which is good news for FY 2013 projections.

Total revenue per customer is declining steadily, but that is to be expected as the number of customers dramatically increases. What is occurring though (and what we want to see) is that the net loss per customer is steadily decreasing. It has changed from a low of around $5,000 in 2010 and 2011, to about $500 in the most recent quarter. If SolarCity can keep that trend going then the company will soon be in the black again. Another important metric is the acquisition cost per customer, which has remained steady at 2012 levels.

I also find it encouraging that SolarCity’s debt levels remain reasonable, just about the same as 2012 levels. It is important to understand that in many ways SolarCity is a financial company, crafting and offering creative finance options to allow clients to get solar done with minimal up-front costs. As with other financial firms, debt is a big part of SolarCity’s business, so it must be analyzed under that spotlight.

Though I still view SolarCity as an investment for the speculative portion of a portfolio, the long-term prospects for this company are very compelling. For example, SolarCity recently announced its biggest project to date—a 24 megawatt, 6,500 Homes in Project at Navy and Marine Bases in Hawaii. Investors that are willing to ride the SCTY stock price rollercoaster are likely to be rewarded in the long term.

IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

A solar stock and an environmental company have been added to the Roen Financial Report Paradigm Portfolio this month. One recycling company is being removed.

SunPower Corporation (SPWR) is being added as a result of its strong price momentum and upwards earnings estimate revisions. SPWR is a vertically integrated California-based solar company involved in the manufacture, installation and service of photovoltaics. Its stock has more than tripled in price on large volume since its December lows, up 260%! Sales have been strong, and the stock price is still below levels of around two years ago. We still see upside potential from here. It should be noted, however, that the Roen Financial Report considers SPWR a speculative investment since it has high volatility, and is still in negative earnings territory.

CLARCOR Inc. (CLC) provides air and water filtration products worldwide. This sizeable company has over $1 billion in sales, and over 5,000 employees. It has high quality financials with growing dividends, steady earnings and low debt. CLC is being added this month because it is reasonably priced, trading in the mid-range of what the Roen Financial Report calculates to be fair value.

Kadant Inc. (KAI), a small cap company that supplies equipment for the papermaking and paper recycling industries, is being dropped from the Paradigm Portfolio this month. We still consider this a high-quality company, but it looks overpriced at these levels. We will continue to track KAI for reentry into the portfolio if its price becomes more attractive.

The objective of the Paradigm Portfolio is to pick the highest quality companies that are considered best positioned to benefit from the economic paradigm shift away from foreign oil and polluting coal and towards cleaner energy alternatives. These are leadership companies that play an important role in redefining our energy future.

IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

Remember to always consult with your investment professional before making important financial decisions.

Five solar stocks announced key updates – three show improved prospects, and two warn of danger.

STOCK ALERT SECTORS

IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

Performance for alternative energy mutual funds were very good for the past 12 months, averaging 11.7% for the eleven funds covered by the Roen Financial Report. In fact, eight out of 10 funds had double-digit gains for the year (there is no data for Brown Advisory Winslow Sustainability (BAWAX) since it only started trading in June 2012). Also, Most of the mutual funds are trading near the top of their annual price range.

Three month returns have also been respectable, with ten out of eleven funds posting annual increases (and Guinness Atkinson Alternative Energy (GAAEX) just showing a slight loss).

Returns for ETFs were much more variable than MFs. One year returns ranged from a gain of 24.2% for Market Vectors Global Alternative Energy ETF (GEX), to a loss of 35.2% for iPath Global Carbon ETN (GRN). Of the 17 alternative energy ETFs that the Roen Financial Report covers, over half showed annual gains. On average, though, returns were basically flat for both 12 months and 3 months.

Despite this lackluster performance for ETFs, their prospects seem to be getting better. On a rolling average basis, one-year returns have improved for alternative energy ETFs. In March, for example, the average ETF lost 6.8%. Similarly, there were one-year losses for February, January and December 2012. In fact, December saw an average ETF loss of 15.1% over the course of a year. The Roen Financial Report will be watching this trend closely to see if alternative energy ETFs continue to improve.

Though this discrepancy between ETFs and mutual funds may vary over time, alternative energy investors are wise to look at the entire fund landscape when deciding where best to deploy their assets.

IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

The Roen Financial Report is pleased to announce a significant update to its special report Invest Solar: Solar Energy Investment Opportunities. This revealing report will help readers navigate the challenging and potentially rewarding world of solar investing.

Solar energy started as one of the hottest investment themes of the past decade, but has since become extremely volatile. The chart at right shows that between 2006-2008, solar stocks gained an average of 50% for any one-year period as measured by the widely watched Ardour Solar Energy Index (SOLRX).

By the end of the decade, however, solar stocks lost their luster as the photovoltaic market became saturated and a tariff war ensued. From 2009 into 2013, solar stocks have been down 36% over the average 12-month period.

Because of this volatility, investors are wise to understand the different types of solar companies. Investments in solar cover a wide range of company types along different levels of the supply chain and using differing technologies. The newly updated report details four different sectors within the solar industry:

•           Solar Equipment Manufacturers

•           Photovoltaic Production

•           Installation and Service Companies

•           Utilities Employing Solar

In addition, Invest Solar outlines three alternative types of solar investment, including:

•           Solar REITs

•           Master Limited Partnerships

•           Solar Crowdfunding

The report compares 41 solar energy companies, making an apples-to-apples judgment within each of the four solar sectors. It also gives the pros and cons of similar stocks, showing the best companies within each category, and describes what has put them on top.

Despite the challenges investing in solar, opportunities still abound. For example, photovoltaics are being deployed on a scale that would have been hard to imagine just 10 years ago. In the U.S. alone, an estimated 3.3 gigawatts of new solar capacity was installed in 2012, which is as much as was installed in the 4 previous years combined!

Considering this and other trends, three clear themes are outlined in the report to aid in investment decisions:

•           Consolidation

•           Installation

•           Determination

Overall, I believe solar is set to continue its growth and prove an excellent long-term investment if you are in the right stocks. I urge you to download the updated report today!

IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

Three companies in solar had gains today. Duke made a significant acquisition; First Solar offered positive guidance; JinkoSolar posted an upsetting loss.

STOCK ALERT SECTORS

IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

The first three months of 2013 proved to be extremely upbeat for the stock market. The S&P 500 and Dow Jones Industrial average hit new all-time highs, and both were up double digits for the quarter. Echoing this superb performance, the top alternative energy stocks in the Roen Financial Report did even better. The Paradigm Portfolio was up 14.1% on average, with gainers beating losers by a 6 to 1 margin.

The top three gainers for January through March were Cree (CREE), Pike Electric (PIKE) and SolarCity (SCTY), all up in the 50% to 60% range. Cree advanced on excellent profit guidance from the company released back in January. Pike’s stock rose on a stellar earnings report issued in February, which showed steadily rising revenues, profits, net income and earnings per share over the past year. SolarCity remains a speculative investment, considering the company is still in start-up mode and spending more money than it makes. Apparently, though, investors (including myself) believe that SolarCity’s innovative business model, one that aspires to make it the leading U.S. solar installer, will be a winner in the long-term.

Chinese energy product manufacturer Jinpan International (JST) fared the worst, losing almost 9% for the quarter. The company expects that revenues and net income will come in well below analyst estimates for fiscal year 2013.

For more information on the Paradigm Portfolio, including subscriber access to a complete list of stocks and detailed company reports, please visit http://www.roenreport.com/about/paradigm-portfolio/.

IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

*Hypothetical gain from portfolio recommendations. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities on this list.

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IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

Remember to always consult with your investment professional before making important financial decisions.

(The following is from an article that appears in USA Today Green Living.)

Terrific news: green investing is easy, good for the earth and fun! So says Harris Roen, a seasoned green investing expert at RoenReport.com. In an interview with reporter Craig Shields, Roen reveals easy ways to harmonize your morals and your money.

Q: What is ‘Green Investing’?

A: It’s a way to own a piece of companies in the business of sustainability.

What kind of companies are these?

Green companies are spread across a wide range of investment sectors, including solar, wind, smart grid, energy efficiency, alternative fuel and environmental companies. Some are large conglomerates, like GE and Johnson Controls, where alternative energy is a small but important part of what they do. Others are “pure play” companies such as First Solar and Tesla Motors, which are solely focused on a green industry.

Where do you see opportunities?

Energy efficiency is one. It is much cheaper to save a watt than to generate one, and many companies are making profits doing just that. Another trend is offshore wind. There is a big project in the pipeline off the northeast coast, and no doubt more are coming.

How risky is it?

I take a long-term perspective on green investing, and believe that sectors like solar, wind, smart grid and energy efficiency are growth industries. Any investment comes with risk, though, so invest responsibly. For example, in a volatile sector such as solar it is challenging to pick individual winners and losers, so a good strategy is to diversify across several companies. An easy way to do this is through alternative energy mutual funds or exchange traded funds (ETFs).

How much money do I need to start?

Depending on the broker or mutual fund you choose, you can start with as little as $50. A good plan is to regularly invest a part of your savings on a monthly or quarterly basis.

Where do I get started?

A little research can go a long way. At RoenReport.com, you can readily find highly ranked stocks, mutual funds and ETFs within green investing sectors. It’s fun to learn what these companies do, and you’ll feel good aligning your investments with your ethics.

Mutual Funds

All of the alternative energy MFs were up handsomely in the past three months. The biggest gainer was Firsthand Alternative Energy (ALTEX), up 27.3% for the quarter, which also moved ahead in its ranking. Even the lowest three-month gainer, Brown Advisory Winslow Sustainability Fund (BAWAX), was up an impressive 9.2%.

One-year returns were more variable, ranging from a gain of 18.0% for AWATX, to a loss of 11.7% for ALTEX. This has much to do with the solar holdings in these funds. For example, companies in ALTEX such as JA Solar (JASO), Yingli Green Energy (YGE) and JinkoSolar (JKS) have had outstanding quarterly returns, but are still down substantially for the year.

Exchange Traded Funds

The average three-month return remains high for alternative energy ETFs, at 13.6%. The notable exception is GRN, which has suffered from the steep drop in carbon prices. Two solar ETFs have done the best in the past three months, TAN and KWT. Both these funds, though, have taken a beating over the longer term, as can be seen in their one-year and three-year returns.

PowerShares Global Wind Energy Portfolio (PWND) is no longer trading, and closed out at $6.23/share on February 26th. What happened was that the amount of assets under management were too low for the company to justify keeping the fund open. This is not an uncommon occurrence in the over-crowded ETF world. KWT, GRN and First Trust NASDAQ® Clean Edge® Smart Grid Infrastructure Index Fund (GRID) are also on watch for having the potential to be shut down and liquidated. This is a good reminder that care should be taken, as many alternative energy investments can be highly speculative on both the upside and the downside.

IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

Remember to always consult with your investment professional before making important financial decisions.