Craigmillar’s Global Clean Energy model on Covestor focuses on companies in the alternative energy sector that manager Robert Preston (pictured) believes will benefit from the long term trend of global energy decarbonization.
Robert has over 30 years of experience in finance, energy research and renewable energy. He worked at Merrill Lynch, and prior to that held senior positions with other large financial firms (Paine Webber, L.F. Rothschild, Union Bank of California and Nomura), most recently acting as President of AXA Investment Managers New York. He is also an acting board member with the Northeast Sustainable Energy Association, Darragh Company, BusinessWeek Energy Series and the Dover Land Trust. Robert received a BA in Political Science and Economics from Tulane University and an MBA from the University of Edinburgh, Scotland.
Here’s some insight to the investment process at Craigmillar:
Tracking of the global decarbonization of energy takes us to related opportunities that you would not normally find in a clean energy focused fund. For instance let’s look at wind and solar power. One of the big issues here is the spatial requirements for building wind and solar farms, thus placing them generally outside of the urban areas that are the places that need the energy. So a critical issue will be how to transmit that energy from the place of production to the place of use. The process led Craigmillar to look at this issue of transmission and research those companies that were set up to deliver and build those transmission lines. So in this search, Craigmillar found a company like General Cable, a materials company that would not fit into the clean energy definition but will have a critical role in the new energies and will benefit from the change.
Current top holdings in the model include CARBO Ceramics Inc (NYSE: CRR), United Technologies Corp (NYSE: UTX) and General Cable Corp (NYSE: BGC). The most recent trades: Craigmillar bought EnerNOC (Nasdaq: ENOC) and sold Siemens (NYSE: SI) on 3/31.
EnerNOC is a Boston-based provider of clean and intelligent energy solutions, which include demand response services, energy efficiency, or monitoring-based commissioning, services, energy procurement services and emissions tracking and trading support services. Bank of America Merrill Lynch issued a report in late March on the cleantech sector, mentioning ENOC as a potential winner in the space. Via 24/7 Wall St:
The firm has a view of several key winners, although the report also indicates that alternative energy does not have much of edge in the short-term as it is expensive… EnerNOC, Inc. (NASDAQ: ENOC) was listed as one it overestimated in 2011 to 2012 but notes that there could still be substantial upside. The $23 price target compares to $19.30 today.
Alt energy portfolio manager Tom Konrad, who will soon debut his Covestor model, had these comments about ENOC recently:
I’m quite puzzled at the poor performance of demand response companies EnerNOC (ENOC) and Comverge (COMV) so far this year. Demand response companies make money by helping utilities reduce electricity loads through agreements with electricity customers when the utility has trouble meeting demand with available generation capacity.
The news for Demand Response companies has been quite good, with the Federal Energy Regulatory Commission (FERC) recently establishing a landmark ruling which will require utilities to pay demand response companies as much as electricity generators are paid for power capacity. Each market operator must implement this rule by July 22nd, and the resulting tariff changes should open up many new opportunities for demand response companies.
Earlier this quarter, EnerNOC was accused by grid operator PJM of market manipulation, but the case was later dismissed by FERC as having no merit, which is the best outcome EnerNOC could have hoped for.
