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2005-10-03
Energy Tech Sector Soars in Third Quarter
DEFG's Distributed Energy Stock Index (DESI) Outperforms All Major Benchmark Indices
For Immediate Release - October 3, 2005
Contact: Jamie Wimberly - (202) 483-4443
Washington, DC ... The Distributed Energy Financial Group LLC (DEFG, www.defgllc.com) announced today that the Distributed Energy Stock Index (DESI), an index of 26 publicly-traded distributed energy and alternative energy technology companies, gained 15.4 percent in Q3 2005.
The DESI outperformed all the major benchmark indices in Q3, recording a gain 3 to 5 times better than the indices listed below.
DESI (+ 15.4 percent)
- vs. S&P 500 (GPSC) (+3.1 percent)
- vs. Dow Jones Industrial Average (DJI) (+2.9 percent)
- vs. Nasdaq (IXIC) (+4.6 percent)
- vs. Russell 2000 (RUT) (+4.4 percent)
"Hurricane Katrina definitely sparked growth in the energy tech sector by highlighting the value proposition of these technologies, particularly reliability and control over power sources located at or near the customer's site," stated Jamie Wimberly, CEO of the Distributed Energy Financial Group (DEFG). "However, the DESI was performing well before Katrina. We believe that five deeper trends are aligning to drive the sector's growth over the mid-term, including: 1) higher energy prices overall, making newer technologies competitive with traditional sources of energy, 2) increasing number of outages, large and garden variety, due to aging and stressed electric distribution grids, 3) ramping up of government incentives, subsidies, and resource portfolio standards, particularly at the state level, 4) a wave of capital beginning to enter the sector, and 5) a growing realization that many 'energy' technologies are actually platforms, e.g., advanced meters, for cross-over applications into the communications and transportation sectors."
Given the DESI's composition of mostly micro cap and small cap stocks, the Russell 2000 is the best benchmark index for comparison purposes. As Figure 1 shows above, the DESI clearly outperformed other micro cap and small cap stocks by a wide margin.
The DESI is organized into five segments (SEE Figure 2 below): 1) prime movers, 2) power quality & storage, 3) renewable, hydrogen & fuel cells, 4) demand management, metering & controls, and 5) enabling technologies. For Q3, the renewable, hydrogen & fuel cells segment far outpaced the other segments with a 61 percent gain. All the other segments also recorded solid gains ranging from 6 percent to 15 percent.
DESI Charged (Leaders) Companies:
- Beacon Power Corporation (BCON) = +183.5 percent
- Capstone (CPST) = +179.5 percent
- Energy Conversion Devices (ENER) = +100.5 percent
DESI Grounded (Laggards) Companies:
- Quantum Fuel Systems Technology (QTWW) = (-)18 percent
- Power One (PWER) = (-)12.2 percent
- Plug Power (PLUG) = (-) 0.7 percent
"It is an open question whether this kind of growth rate for the sector and individual companies is sustainable," stated Tom Brunetto, Managing Director of DEFG. "This sector is known for its volatility on a quarterly, and even, daily basis. While large events like Katrina have driven short-term spikes in the share prices of energy technologies in the past, what we are seeing is that the deeper trends are becoming evident in increased sales and contracts; in other words, the long-term growth will be business-driven. This quarter could very well mark the tipping point that we have long anticipated."
For more information on the DESI or to subscribe at no charge to the DESI Quarterly Report, visit www.defgllc.com.
The Distributed Energy Financial Group LLC (DEFG) is a specialized consulting and financial services firm focused on innovative energy technologies and solutions. Through the issuance of this press release, DEFG is not giving investment advice, tax advice, or other advice.
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