Kelley is a member of The Motley Fool Blog Network — entries represent the personal opinions of our bloggers and are not formally edited.
Nothing feels better than when a company you have invested in not only makes you some cash, but also does something for the greater good. It could be a large donation to a relief fund or making the switch to environmentally friendly packaging. Even better than these glimpses of goodness, however, is finding money-making investments whose main purpose is positive change. It doesn’t happen very often, but every once in a while the heavens align and the environmentally conscious company you have been eyeing becomes a wonderful money-making investment.
When scoping out companies that have this potential, I came across Ameresco (NYSE: AMRC), a company whose focus is helping facilities improve overall energy efficiency by upgrade their energy infrastructure, and thoughtfully linking companies to renewable resources. The environmentally green potential of this company is easy to see.
Ameresco has done some great work; here is an interesting synopsis of one of their projects that I pulled from their website, “Ameresco brought BMW (NASDAQOTH: BAMXF) together with Waste Management (NYSE: WM) to develop a landfill-gas-to-energy pipeline that supplies 25% of the electrical and 100% of the heating needs for BMW’s Spartanburg, South Carolina plant.” With increasing awareness of global climate concerns, renewable energy options, and energy inefficiency, Ameresco is in a great position to take advantage of this changing tide in energy. With offices in over 30 states, a CEO/founder who has extensive expertise in the energy field, and an innovative cost structure that allows for no-capital energy projects Ameresco seems to be well positioned to take advantage of the country’s changing energy needs. But can it make us any green?
When we look at Ameresco stock on the surface, it is fairly appealing. As of market close on December 14th the stock was at $ 11.66 a share which, given the 52 week range of $ 8.60-17.46, is far closer to bottom leaving us some room to run. A year over year comparison of the third quarter balance sheet shows the company’s total assets are up $ 239 million. There is an increase in the amount of cash on hand and in accounts receivable, which means cash is coming down the pike.
This is a good sign, but the number I often find more telling is the amount of debt that the company has been incurring. This number has also jumped over the year by almost $ 200 million. To be fair, the company made two acquisitions this summer and this often means increased debt and other expenses. Debt does tend to go hand in hand with expansion and as a rapidly expanding company with increasing amounts of work on their books, I am not overly concerned by it in Ameresco’s case.
Overall, I think Ameresco has some real potential to be a “sea of green” stock. On December 2nd, Obama called on governments and private companies to work toward enhancing the energy efficiency of their buildings. I think Ameresco might be in the perfect position to profit from this move to a more energy efficient country.
Kelley Ryan does not own shares of any company mentioned.