Friday, January 22, 2010
Energy Efficient Lighting Stock Review and Future Prospects
Energy efficiency represents the most expedient approach to reducing energy consumption and C02 emissions. According to the International Energy Agency (IEA), one dollar invested in more efficient electrical equipment avoids more than 2 dollars in investment in electricity supply.
Manufacturers of LEDs (light emitting diodes) are producing lighting that is environmentally friendlier and considerably more energy efficient than traditional lighting products. The potential savings from LEDs are truly remarkable as approximately 12.5 percent of global electricity production is used for lighting.
To help investors see the value of renewable energy, The Green Market followed the progress of Solar, Wind, and Geothermal stock in 2009. To help investors see the value of energy efficiency, The Green Market has followed the progress of (smart) grid stocks, and on January 14, 2009, The Green Market added its portfolio of energy efficient lighting stocks. Here is a review of The Green Market's lighting stock for 2009.
In 2009, Cree Inc. (NASD: CREE) gained 250 percent, Philips (NYSE:PHG) gained 42 percent. Lighting Science Group, previously known as LSCG.OB has changed to LSCG.PK and from its inception on May 21, 2009 until years end, Lighting Science Group (LSCG.PK) gained 6 percent. Together, The Green Market's energy efficient lighting portfolio gained 99.53 percent in 2009.
Koninklijke Philips Electronics (NYSE:PHG): Lighting is one of the company's 3 major divisions. Philips has established itself as a leader of LED technology with the development of an (LED) bulb said to produce as much light as a 60W incandescent bulb using less than 10W, and lasting 25 times as long.
Cree, Inc. (NASD: CREE): A leader in LED lighting including chips and components. Recently, the company's shares jumped more than 17 percent after a brilliant year end 2009 earnings report. Strong sales powered Cree to quarterly revenue of $199.5 million, up 35 percent year over year and the highest total recorded by the company for a single quarter. Cree's near term focus is on factory execution and capacity expansion. They have a strong balance sheet and are in a leadership position. Cree expects revenue of $215 million to $225 million in its fiscal third quarter, ending March 28, while the Thomson Reuters estimate calls for revenue of $189.2 million. In 2010 Cree will continue to better Wall Street's expectations.
Lighting Science Group: (LSCG.PK): In May of last year, LSCG.OB was changed to LSCG.PK because they failed to file their 2008 form 10-K. Lighting Science are designers, developers, manufacturers and marketers of LED lighting solutions. On January 6 of this year, they announced their new directors.
There are significant commercial and residential applications for more efficient lighting. In the US, sixty-watt lights account for 50% of the domestic incandescent market; replacing conventional light bulbs with LED could save electricity equivalent to the energy required to power 17.4 million households.
The widespread acceptance of LED lighting will be driven by the market (ie: the need to reduce costs and enhance productivity). As we transition to more efficient forms of lighting, energy efficient lighting companies are destined to grow.
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