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How to Invest in Wind Power – Experts Give Their Advice
To invest in wind power, for starters, you should find publicly-owned companies with interests in wind power. Public companies are split into two categories. One is referred to as “pure play”, and their business is focused solely on wind power. The other category consists of diversified corporations, which operate in various fields including wind power holdings. All wind power investments are made through these two categories of business.
The next step would be to decide if you would like to invest in a diversified corporation. There are numerous large, diversified corporations that are currently developing all wind projects in the U.S. This is quite a powerful sign, which demonstrates that this industry is maturing. FPL Energy, which is a subsidiary of Florida Power & Light, is the largest company currently involved in developing U.S.-based wind power projects. A Merrill Lynch financial consultant, Maria Clendenin, said that the down side of diversified companies is that their interests might not always be aligned with the investor’s conscience. For example, a company that has wind power holdings could also own nuclear plants. So, you cannot selectively invest only in their wind operations. If you want to support the development of clean energy, then you should thoroughly research and evaluate the diversified corporations you wish to invest in.
Pure play investments might be a better decision, but they have a more complicated purchasing process. Some purely wind energy companies which are publicly traded include Vestas and Nordex. These two can be found on the Copenhagen stock exchange. Unfortunately the U.S. media doesn’t give international corporations much coverage. Therefore, if you want to invest in foreign interests like these, you need to be prepared to spend more time researching them. They all provide annual reports and other materials in English, so this can surely help you make the right decision regarding your investments in wind power.
Americans can buy stock exchanges using one of the processes referred to as ADS/ADR. The New York Stock Exchange has some foreign companies trading on it in the form of American Depository Shares (ADS) or American Depository Receipts (ADR). Ericsson, Nokia, and BP/Amoco are all examples of these kinds of companies. Purchases made through ADS/ADR can be in U.S. dollars, which makes it very straightforward. A certified stockbroker of securities trader can also make these transactions on your behalf. Some foreign company stocks are not available on the New York Stock Exchange, so you would have to purchase them “over-the-counter” (OTC). These purchases are made in the host nation’s currency, and not in U.S. dollars. There are many brokerage firms which have OTC desks to deal with this specialized trading form. For American brokers it takes more effort to track foreign companies, keep an eye on the markets where they operate and keep track of the currency exchange rates involved. Therefore, you should always deal with a brokerage company that has an OTC specialist. Investors from the U.S. can purchase Vestas or Nordex stocks via OTC.
The information supplied in this article is not to be considered as medical advice and is for educational purposes only.
|Alternative Energy Stocks26 Jul 2010