Several weeks ago, a subscriber suggested that we revise our Energy (Coal/Other) Industry Group listing for Energy (Other) by separating "the solar/clean energy stocks into their own group." He said it was a bit ironic to have the clean (solar) grouped with the dirty (coal). He also said the solar group has stunning growth potential going forward. Of course he was right. So we reorganized the Energy Business Sector into two Industry Groups: Energy (Clean) and Energy (Coal).

An examination of the dataset for each of these new groups is very interesting. There are 56 stocks in the Energy (Clean) group while the Energy (Coal) group contains only 26 stocks. Only 19 of the 56 stocks in the Energy (Clean) group have EPS values above 0.00, while 17 of the 26 stocks in the Energy (Coal) group are forecasted to make money over the next 12 months. Not surprisingly, the average RV for the Energy (Clean) group is 0.69 and that of the Energy (Coal) group is 1.08. Both groups have average RS values below 1.00.

With so many money losers in the Energy(Clean) group, its average GRT is a deceptive 11 %/yr. Don't let that fool you, there are a dozen blazers in this group with GRTs above 30 %/yr. There is only one blazer in the Energy (Coal) group and that's Massey Energy, MEE. Finally, the average annual sales of the stocks in the Energy (Clean) group is only $174 million compared to $1.303 billion for the Energy (Coal) group.

I also found it interesting to look at the graphs of both of these new Industry Groups. The All-Weekly graph of the Energy (Clean) Industry Group shows all the earmarks of new technology stocks. Its Price skyrocketed in early 2000, as so many other speculative stocks did, only to crash in the subsequent bear market. Since April 2003, however, it has gone up in Price more or less steadily even though these stocks have been persistently overvalued. Currently the group is moving swiftly higher with an RTRanking of 29.

The long-term graph of the Energy (Coal) group shows that it actually went down in Price from mid-1995 to April 2000. It spiked higher in 2001; then moved lower into October 2002. Higher oil prices helped this group of stocks move up with the great bull market of the last five years, but its Price peaked in September 2005 when its average forecasted earnings began to move lower. Although the average forecasted earnings of this group is still in a downtrend, it too is in rally mode.

Obviously, the relentless rise in oil prices is behind the investment potential of the stocks in each of these Industry Groups. While I would not reject the dirty old coal stocks out-of-hand, the excitement is really in the clean energy stocks. Only yesterday for example, First Solar Inc., FSLR, soared over $57/share. Additionally, JA Solar Hldgs, JASO, and SunPower Corp., SPWR, rank among the top VST stocks in Stock Viewer.

As a final point, I suggest that you not limit your attention only to solar stocks. A wide range of other technologies, such as fuel cells, biofuels, wind power and ocean power, are also represented among the clean energy stocks. As I write this essay, I'm thinking we should create another Industry Group for uranium stocks which are located in the Mining (Other) Industry Group in order to complete our separation of Strange Bedfellows.