I Bet You My Smart Grid Stock Outperforms Yours

Published Wed, Mar 20th, 2013   Louis Basenese, Chief Investment Strategist

Two weeks ago, I panned the IPO prospects for leading smart grid technology company, Silver Spring Networks (SSNI).

Immediately afterwards, some readers, (who’ve obviously never met a cleantech investment they didn’t like) insisted that I’d be eating crow once the company went public.

But I’m not. At least, not yet.

After pricing at the midpoint of its proposed IPO range last week – and selling one million more shares than expected – Silver Spring’s stock leapt by 30% out of the gate.

Impressive.

Except the momentum didn’t last long. In fact, it didn’t last past the first day. So far, the stock hasn’t been able to top its opening day high.

Okay, to be fair, the company has only been trading for five days. However, I still think it’s destined to dramatically underperform the market this year.

Now, helping you preserve your capital by avoiding doomed investments like Silver Spring is just one part of my M.O.

But you also expect me to help you accumulate more capital by sharing compelling investments that are destined to quickly increase in value.

So today, I want to shift gears and focus on the accumulation side of my job description. Here goes…

This Stock is Ready for a Breakout

Sticking with smart grid technology investments, there’s an under-the-radar player in this growing area that I’ve been tracking for almost a year now.

And on the heels of a new financing deal, I’m convinced that it’s going to put up impressive growth in 2013.

In turn, its stock is destined to climb higher, too.

So much so, in fact, that I’m ready to place a friendly wager with all those Silver Spring bulls out there…

I bet you my smart grid stock outperforms yours in 2013! Any takers?

Before you answer, here’s a rundown on the company that I’d rather put my hard-earned capital (and reputation) behind…

A Truly Smart Play on the Smart Grid

Everyone has heard the term “smart grid” bandied about. Yet few actually realize what it really entails – and, more importantly, what it’ll take to make it a reality. So allow me to clarify.

The goal of the smart grid is simply to maximize the efficiency and reliability of our existing (and old) power infrastructures. In other words, ending our “dumb grid” ways in favor of “smart” practices.

Specifically, it means ending our reliance on meter readers to gather much of the data needed to provide electricity. Instead, the “smarter” way to collect information and allocate resources is to use two-way communication and automation technologies, which have been used successfully for decades in other industries.

The other major component of the smart grid is to integrate various renewable power sources (wind, solar, geothermal) into the system.

So, simply put, the smart grid is all about modernizing our electricity system. Finally.

However, while the theory sounds simple enough, one problem exists: In order to realize the full potential of the smart grid, we need a reliable, cost-effective way to store energy that would otherwise be wasted.

That’s where ZBB Energy Corp. (ZBB) comes in…

Founded in 1998 and headquartered in Menomonee Falls, Wisconsin, ZBB Energy Corp. develops energy storage and management solutions.

Using proprietary, rechargeable zinc bromide flow batteries, ZBB provides a plug-and-play, scalable system to integrate and manage multiple energy generation sources. That includes both conventional and renewable sources.

Or, as ZBB likes to say, it’s the equivalent of a Cisco (CSCO) router for the power markets. By providing a single point of connection to the grid and storage, it optimizes energy availability in any system.

Of course, suggesting that it’s the Cisco of the power markets implies that its technology is superior to others. And that’s certainly the case, as evidenced by the fact that ZBB is the market leader in winning energy storage designs for the U.S. military.

Government validation isn’t what interests me most about ZBB, though.

So what does interest me? Stay tuned for my next column to find out.

I’ll share just how rapidly the market for ZBB’s solutions is growing… the company’s key competitive advantages… and, of course, the number one reason why shares could be on the cusp of a major breakout.

Ahead of the tape,

Louis Basenese