Is Your Portfolio Shovel Ready?

Now that all of the engagement hoopla has subscribed, the incoming Obama administration is expected almost immediately to roll up their sleeves and resignation efforts to stimulate our floundering economy by providing funding for "shovel ready" projects.

In addition to the growing population of unemployed Americans, increased government spending will also create opportunities for investors that place their bets in the right sectors. If the "shovel ready" stimulus package is approved and as significant as many hope that it will be, here are 3 key areas that I'll be looking for to prosper.

Alternative Energy

Since President Obama has already trumpeted its desire to kick our foreign oil habit and invest heavily in alt-energy over the next decade, this sector should be a shoe in for stimulus package funding.

Solar Outlook Could Brighten With Substantial "Shovel Ready" Funding

However, it will be that technologies that can be quickly deployed in an economically efficient manner that will benefit the most. Since solar energy systems can be installed rather quickly, shovel ready stimulator would probably have a very positive impact on this sector of the clean-energy industry.

While a multitude of factors including lower poly-silicon prices (a key component in solar panels) and a catastrophe credit market aligned to cast a cloud of negativity on the market in '08, the "Obama Effect" may cast rays of success on the solar sector in 2009. The US Department of Energy Solar Showcase Program is already exhibiting how far solar power technology has progressed over the past decade and additional financing could significantly expand the initiative while driving overall adoption of solar systems.

If future government spending on viable clean-energy projects meets the nation's lofty hopes, solar wafer manufacturers will cash in. Companies to watch in this sector if / when the package meets approved include Suntech Power Holdings (NYSE: STP), market leader First Solar (NASDAQ: FSLR) and LDK Solar (NYSE: LDK). In the sub- $ 5 range, Evergreen Solar (NASDAQ: ESLR) is worth a look.

The emerging solar product manufacturer is ramping up capacity in Massachusetts, a hotbed for growth thanks to the Green Communities Act, which enacts the most aggressive clean-energy policy of any US state.

ESLR's revenues were up 31% for the first 9 months of 2008 and the company reportedly has an order backlog of approximately $ 1.7 billion. Despite recent lower revenue estimates for both 2008 and 2009, Thomas Weisel Partners' forecasts Evergreen's revenue to more than double from $ 113.1 to $ 360.5 this year.

Analysts believe that the decision to close its pilot facility in Marlborough Mass, in favor of a more efficient new plant in Devens, Mass, could facilitate profitability in 2009 despite it resolved in a $ 30 million hit to the balance sheet in 2008. Evergreen claims to Be the "industry leader in efficient silicon consumption" and aspirations to reduce its usage from 5 grams per watt currently to 2.5 by 2011 and 5. by 2014.

The major potential upside here is that if Evergreen can continue to increase manufacturing output while simultaneously slashing costs, the company could possibly be capable of generating electricity at prices competitive with fossil fuels. Demand created by Obama's stimulus package and renewable energy mandates like the Green Communities Act should only help the cause.

Wind Power and Geothermal Also Poised to Benefit

Recent approval of the Cape Cod wind farm project in Massachusetts is expected to pave the way for more large-scale wind power projects in the US going forward. Growing popularity of wind as a power source and the government's plans to ramp up spending on renewable energy create a very favorable environment for related companies.

Some of these include General Electric (NYSE: GE), a leading global wind turbine manufacturer, FPL Group (NYSE: FPL), a leader in US wind power generation, and American Superconductor (NASDAQ: AMSC), a provider of electrical systems used in wind turbines to increase electrical grid capacity.

Interested in a small cap world gamble? Take a look at Composite Technology Group (OTCBB: CPTC). The company's DeWind, wind turbine segment segment related revenues from $ 17.6 million in FY2007 to more than $ 40 million in FY2008. As of 12/15/08, CPTC had $ 288 million in potential turbine orders under contract, $ 50,000,000 of which the company feels are firm and deliverable during FY2009.

Now placing a greater focus on joint ventures such as wind farm projects that rely on outside funding which could be provided by the government, Composite should benefit from the incoming surge in clean-energy projects brought on by ready to shovel stimulus spending and state renewable portfolio standards.

Raser Ready to Shovel

In the geothermal space, I like Raser Technologies (NYSE: RZ) for a multitude of reasons. But for the sake of this discussion, RZ's ability to build out functional geothermal power plants in 12-18 months makes the company very attractive as massive funding is considered for ready to shovel projects. RZ set the world record for building a geothermal power plant recently and has 7 more in the works. Since Raser has proven its ability to turn low temperature geothermal resources into energy in record time, a stimulus program could certainly give the company a boost.

Healthcare Technology

The new President has also committed to conduct a massive healthcare overhaul. In addition to providing Americans with quality medical coverage and strengthening overall public health, modernizing the US healthcare system has been identified as a primary objective of future healthcare reform.

Although total health care spending represented 17% of US GDP in 2007or $ 2.4 trillion (NCHC), the health IT market represents just 2% of the $ 973 billion US IT sector (Gartner Inc.). In order to improve quality of care throughout the country and bringing thousands of medical facilities out of the Stone Age, billions of dollars could soon be injected into the health care information technology sector.

Some leaders in the space that I feel deserve a look include:

Cerner Corp (NASDAQ: CERN) – The leader in hospital installed electronic records provides a suite of software solutions that help maximize efficiencies and control costs in medical facilities.

Cerner has maintained a solid compound annual growth rate of 14% over the past 3, 5, and 10 years and has amassed a client network of more than 6,000 hospitals, medical practices, pharmacies, etc. With a solid installed base of customers and a proven technology offering; CERN is well positioned to benefit from increased government spending on health care organizations.

QuadraMed (NASDAQ: QDHC) – The electronic records software provider serves a base of 2,000 health care providers and has developed a best of breed revenue management solution for medical facilities that could become more broadly adopted if the government starts shelling out funding in record fashion.

Merge Healthcare (NASDAQ: MRGE) – The provider of medical imaging technology recently partnered with IBM to equip medical professionals with solutions that allow them to access medical images from mobile devices including the iPhone. Representing a breakthrough in the medical field, the system eliminates the need for additional storage capacity and specialized systems to accommodate large downloads. The solution should be high on the wish lists of many medical professionals if / when significant government funding is delled out.


Between Obama's shovel ready plan and aspirations to make high-speed web access a reality in every US household, the broadband communications market should receive a welcomed boost by a potential shovel ready plan.

Currently, about $ 6 billion has been allotted out of the $ 825 economic stimulus bill to promote ubiquitous broadband. While many leading telecom providers worry that's not enough, its not a bad start and the speed with which the government has moved so far is quite promising.

Although the major providers will not be able to make the necessary upgrades alone, industry leaders including AT & T (NYSE: T) Verizon (NYSE: V), Comcast (NASDAQ: CMCA), Time Warner (NYSE: TWX), and Qwest Communications (NYSE: Q), will benefit from the plan. These stocks all got battered in 2008 and could bounce back if the stimulus works.

Cogent Could be a Sleeper

Teleco network provider Cogent Communications (NASAQ: CCOI) now carries 17% of all web traffic and could be awarded some major government contracts in plans to equip the nation with high speed Internet move forward. The company reportedly provides network access for 50% to 98% less than competitors including AT & T and Verizon and has sparked a trend that could cut annual telecom spending by $ 300 billion. If the government's looking for network band with, why not go with the lowest bidder?

As unemployment continues to soar, economic stimulus can not seem to come fast enough. While it may take some time for funding to get approved and begin pumping life into the three sectors mentioned above, now is a great time to begin evaluating opportunities in each. Hopefully, this piece plays a key role in getting you to do so.