Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (10101)	6/3/2006 1:03:12 PM
From: Smiling Bob	Respond to of 19256

ESLR - getting a double pump.Monday should be fun(I hate weekends) Cramer rated a buy and analyst upgrade for alt energies, including biofuels ie. BSLM Power Player Andrew T. Gillies 06.05.06 Alternative energy is hot. So is energy infrastructure. Sanjay Shrestha tells you how to get a piece of these sectors. Not much has changed since the reformers went after stock analysts in the aftermath of the tech bust. Brokerage firm analysts are still, for the most part, bullish; it's hard to make a living telling people what not to buy. And their employers still make much of their revenue doing investment banking for companies the analysts are expected to evaluate. Still, the best of the breed certainly earn their keep by making accurate forecasts of earnings. Sanjay Shrestha is one of these. Shrestha fits the sell-side archetype. He rates 15 of the 18 stocks he covers a "buy" or a "strong buy," and many of those are companies for which his employer, First Albany Capital, either makes a market or does investment banking. That hasn't stopped him from making extremely accurate predictions about earnings. For two years he has won a spot in our Best Analysts rankings, based on data maintained by StarMine about individual forecasts. The 32-year-old Shrestha is quick with a laugh and holds forth freely on topics such as the implications of the polysilicon shortage, the history of 20th-century energy infrastructure or the political turmoil that has recently shaken Nepal, the land of his birth. He has hopes for a return to peace in Kathmandu and is grateful for the opportunities he's had in America. On an undergraduate scholarship to the College of St. Rose in Albany, he switched from his prior interest in science to finance and turned that background into a Wall Street career. In 2000 he took a job at First Albany covering companies that are developing new energy technologies. Two years later he added the engineering and construction services sector. Special Offer for Forbes.com members -- receive a Free Trial Issue of Forbes Magazine... no risk... no obligation! Click here for your Free Issue! Both sectors are hot now. Government and private industry are scouring for energy sources to displace imported petroleum. Maintaining the existing energy infrastructure will demand huge capital outlays--on, for example, the electrical grid. Dallas utility TXU, for example, recently unveiled a $10 billion plan to boost its power-generation capacity for Texas. Building the new plants will be privately held Bechtel, and Fluor. The latter makes Shrestha's favorites list. He predicts that Fluor will earn $3.15 a share this year. You can buy Fluor for 32 times that sum. Shrestha deems management key when sizing up an engineering services company because having the expertise to manage costs is crucial. "It doesn't matter that you've got that backlog," he explains. "It's not going to translate into earnings." His number one engineering pick is Washington Group International. The Boise, Idaho company, which pulled in half its $3.2 billion in 2005 sales from U.S. government contracts, splits its business into six segments: power, infrastructure, mining, industrial, defense and energy. For its fiscal year ended last December, power was the largest chunk, at 24% of revenue. Shrestha likes the company's double-digit backlog growth, as well as its clean balance sheet (it carries no long-term debt). The stock has doubled since Shrestha first recommended it in November 2003, but it's still cheap in his eyes. Washington Group is valued at 0.6 of its annual revenues; the construction-and-engineering sector as a whole trades at 0.8 times revenue. Washington sells for 25 times Shrestha's 2006 earnings forecast of $2.47. Alternative energy--biofuels, solar panels and wind power--is having a good run on Wall Street but is hard to evaluate with the usual metrics like the price/earnings ratio. These outfits tend to swim in red ink, and the stocks get bounced around by oil prices and energy angst. In assessing them Shrestha scrutinizes the soundness of a company's technology. If it passes muster, he then tries to understand the company's plans to compete on price with incumbent technologies. Finally, as with engineering services, he looks hard at whether management has the right stuff. Shrestha likes Evergreen Solar. The Marlboro, Mass. company claims its technology allows manufacture of solar cells that use less polysilicon, the crystalline silicon capable of conducting electricity. Shrestha suggests a polysilicon shortage works in Evergreen's favor. He also likes Wallingford, Conn.'s Distributed Energy Systems, which designs systems that generate power on-site for commercial and government customers and equipment that electrolyzes water to make hydrogen fuel. The company has yet to make money, but Shrestha thinks it could reach a cash-flow break-even in the second half of 2007. His estimate on the 2006 loss per share stands at 35 cents, 11 cents less red ink than the Wall Street consensus. forbes.com Sidebar: The Best and the Brightest Special Offer: Get a Free Trial Issue of Forbes Magazine!