But the keys to the kingdom may be in the hands of Westport Innovations Inc. (USA) (NASDAQ:WPRT). Westport’s technology fixes the problem that has plagued natural gas for heavy trucking for years: adequate power. And with its joint venture with Cummins Inc. (NYSE:CMI) just launching the ISX12 G engine series that targets long-haul trucking directly, the next couple of years could see both Clean Energy and Westport Innovations Inc. (USA) (NASDAQ:WPRT) move from leveraged growth bets to serious profit machines. This isn’t a guarantee, but it’s worth the risk to invest a small portion and wait it out.
Beyond gas
If you haven’t heard of Elon Musk by now, you haven’t been watching the financial news at all for the past year. This real-world Tony Stark is helming some of the most innovative companies in the world, including privately held SpacEx, his own Tesla Motors Inc (NASDAQ:TSLA), and SolarCity Corp (NASDAQ:SCTY), founded by brothers who happen to be Musk’s cousins. While Musk is a brilliant, driven leader whose vision is central to both companies, Solar City and Tesla are bigger than just Musk.
Solar City’s model of using financing to sell customers (homeowners, governments, and businesses) solar systems promising lower costs than the “grid,” isn’t new, but it’s the first company to expand its footprint nationally. This is important for large customers and gives it pricing power versus smaller players. But the real magic for investors was described by Musk: It’s basically a decentralized utility that’s growing like a Silicon Valley start-up. When one considers that it’s contracts are measured in decades, it’s reasonable to project a bright, sun-powered future.
Tesla shares may have gotten ahead of the market, and I’ll admit that I’ve sold shares recently, liquidating half my position. But I did so with a commitment to watch, and learn better how the market will — over a sustained period — price it. I may not be able to buy shares again for below $90, but when I do add more, it will be with a better understanding of how the market will value it. Most importantly, if I didn’t own shares today, I would start a position at this price. This is just too good a story to watch from the outside, and Tesla could easily become much larger than the $12 billion company the market thinks it’s worth today.
Foolish bottom line
The world’s demand for energy isn’t going to stop growing, and no matter how much oil is out there, alternative sources will play a role in the way we power tomorrow. For me, all of these companies have a chance to be a big part of that future.
Jason Hall owns shares of Tesla Motors Inc (NASDAQ:TSLA), Westport Innovations Inc. (USA) (NASDAQ:WPRT), Clean Energy Fuels, Ultra Petroleum Corp. (NYSE:UPL), and SolarCity Corp (NASDAQ:SCTY). The Motley Fool recommends Clean Energy Fuels, Tesla Motors , Ultra Petroleum, and Westport Innovations. The Motley Fool owns shares of Tesla Motors , Ultra Petroleum, and Westport Innovations Inc. (USA) (NASDAQ:WPRT) and has the following options: Long Jan 2014 $30 Calls on Ultra Petroleum, Long Jan 2014 $40 Calls on Ultra Petroleum Corp. (NYSE:UPL), and Long Jan 2014 $50 Calls on Ultra Petroleum. Jason is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article A Regular Fool’s Retirement Portfolio: The Energy Future originally appeared on Fool.com and is written by Jason Hall.
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