Blue Earth Poised to Lead Alternative Energy Space
Innovative Alternative Energy Stock Offers Great Entry Point
Most technology analysts would agree that the green technology industry is one of the fastest growing industries and will remain so for the foreseeable future. However, given its relatively early stage, the energy efficiency and alternative energy arenas are chock full of small companies operating in or selling products to niche segments, in the hopes of attaining a meaninigful market share or leadership status. Unfortunately, since some of these early stage firms only offer solutions within the confines of a single product catgeory, they tend to put all of their eggs in one basket, thus making success a difficult and risky proposition.
In contrast, Blue Earth, Inc. (NASDAQ – BBLU - $1.01 – NR), is no one trick pony. By actively engaging in multiple segments of the alternative energy industry via its innovative turnkey and comprehesive solutions and services, the Company has multiple shots on goal with which to generate meaningful revenue and market share. Moreover, with top-tier leadership, it has the team in place to take it to the next level.
The Blue Earth Approach
Blue Earth operates through four business units: Blue Earth SOLAR; Blue Earth CHP; Blue Earth EMS; Blue Earth PPS and Blue Earth EPS.
Blue Earth SOLAR is the solar PV (photovoltaic systems) division for the engineering, procurement, construction of onsite distributed solar energy generation for commercial and industrial customers. These PV systems enable customers to reduce their dependence on the power grid for their energy requirements by producing energy themselves. Blue Earth SOLAR can build, own and operate the power plant on behalf of customers or build it for the customer to own.
Blue Earth CHP serves as the combined heat and power division for larger manufacturing and processing plants. This division designs, engineers, and constructs applications to utilize appropriately sized co-generation systems to match the thermal requirements of the host plant. In most cases, electricity produced is in excess of the plant requirements and is sold back to the local power utility. Host manufacturing plants save at least 10% on first year energy savings and sign with Blue Earth CHP long-term power and thermal purchase agreements in order to fix their costs. Under this program, Blue Earth CHP owns and operates the co-generation system and performs all engineering and construction work at no cost to the host manufacturing plant.
The Blue Earth EMS (Energy Management Services) division designs and implements Integrated Demand Side Management solutions for commercial, industrial and utility clients. The division boasts dozens of utilities and over 10,000 clients that trust Blue Earth EMS to design and deliver comprehensive energy efficiency programs and solutions. These programs can include the elimination of the waste or energy renewal and production derived from what it already produces itself rather than what it procures on a retail basis.
Blue Earth PPS (Power Performance Solutions) is the real-time measurement and verification, load managing and continuous commissioning division for the monitoring of the following market segments: Grocery/Wholesale Distribution Centers; Office Buildings; Industrial; Government and Hospitals.
The Blue Earth PPS patented system architecture and Real-Time Intelligence Edge (RTi Edge) product line uses hardware and software to provide bi-directional communication and distributed control across a broad range of electro-mechanical systems including solar, HVAC, refrigeration, lighting, security and much more. Continuous commissioning optimizes system performance while collecting pre-emptive maintenance data, doing so increases energy efficiency, equipment lifespan, and reduces energy usage and cost. The technology enables Blue Earth PPS to provide energy monitoring and control solutions with real-time decision support to protect customers' assets by preventing costly equipment failures and food product losses.
The division's PeakPower® System also serves as a platform for companies in multiple markets seeking preventive servicing based on need rather than periodic, scheduled and costly service calls, thus lowering their operating and maintenance costs. These include services for data centers, oil and natural gas wells, remote cell towers, risk management services, and others.
Blue Earth EPS (Energy Power Solutions) serves as the energy power solutions division for battery backup systems. This unit designs, manufactures and sells next generation in energy power solutions including the patent pending UPStealth®, a lead-acid free, energy efficient, intelligent digital battery backup management system designed to power signalized intersections during loss of utility power.
UPStealth® is designed as an alternative to lead-acid battery backup systems, enabling Blue Earth EPS, to provide its customers with an environmentally friendly product that is completely recyclable with no issues of hazardous out-gassing, corrosion, flammable or explosive characteristics. The innovative UPStealth® energy power solution's has a lower cost of ownership, requires less maintenance, performs several years longer, and eliminates costly hazardous disposal issues and in most cases provide twice the energy in less space.
Company Has Most Enviable Leadership in the Space
As evidenced by the links below, even a cursory glance at the Blue Earth management team and board of directors illustrates that the Company likely has a leadership team that is second to none in the alternative energy industry.
This team includes leaders with C-level experience, public company experience, capital markets professionals, and industry leaders at the highest levels. Investors would likely recognize former New Mexico Governor Bill Richardson, who is a former Secretary of the U.S. Department of Energy. Mr. Richardson currently serves as a board member of the Company.
Blue Earth Divisions on Track, Key Milestones Ahead
BBLU has issued very favorable news of late and given its current product deployments, marketing and projects under construction, it appears as if 2015 could emerge as a strong operational year for the Company. In late February, BBLU announced that its UPStealth® nickel zinc battery backup system passed a rigorous Oregon Department of Transportation lab test, paving the way for potential deployment and sale.. It should be noted that 35 other state and city agencies have already adopted the UPStealth® green technology for signalized traffic intersections. Nationwide, it is estimated that there are more than 300,000 signalized traffic intersections, thus offering a huge market opportunity for the Company.
Other units are progressing nicely as well. In January, the Company announced that it closed on a Membership Interest Purchase Agreement to sell its wholly owned, Lenape II Solar LLC, that held the rights to develop, own and operate a 4.732 MWdc photovoltaic (PV) generating facility located in Indianapolis, Indiana to NRG Solar DG LLC. The Blue Earth Solar division is providing the engineering, procurement and construction services for the rooftop and carport PV project. Completion of the project is expected during the third quarter of 2015.
Separately, BBLU could complete its initial combined heat and power ("CHP") energy plant in 1H15. The energy plant will be located at the Pilgrim's Pride Corporation poultry protein processing facility located in Sumter, South Carolina. Pilgrim's Pride is a subsidiary of JBS USA Holdings, Inc. Blue Earth will own and operate the approximate $5.3 million energy plant. Once this is completed and in operation, this proven model can be replicated across the country.
Stock Appears to Be Great Entry Point
Despite this recent spate of good news, the stock is off its September highs, possibly due to delays in project completion; however, it has since bounced sharply and currently trades comfortably off of its 52-week low. Moroever, it is not far below its 50-day moving average. Therefore, opportunistic investors may view the current price as a favorable entry point. After all, with Tier 1 leadership, a diversified marketing and solutions approach, and milestones ahead, the Company's future appears bright.
Senior Analyst: Robert Goldman
Rob Goldman founded Goldman Small Cap Research in 2009 and has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.
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