If you follow the market, you know we’re still going through the pains of a shakeout from last year’s crash. I see it too; that’s why Cabot readers have been largely on the sidelines holding cash since we first saw the technical signs of a severe market slump in early September. It’s also why the Cabot Green Investor model portfolio lost only 15% in 2008 compared to the 40% that the S&P and Nasdaq lost, the 60% alternative energy mutual funds lost and the 70% Green ETFs lost last year.
Now we are seeing early signs the market is building a base that will lead to a new bull market. We’re still largely in cash waiting for confirmation of the trend, but Cabot Green Investor subscribers already have learned of some stocks we believe are ready to be winners.
Flash Player 9 or higher is required to view the chart Click here to download Flash Player nowOne of those is Tetra Tech (TTEK), a Pasadena, California, firm that has expertise in a tremendous number of Green areas. Essentially, when a company or government needs the nitty gritty expertise to go Green, it hires Tetra Tech. We first alerted readers to the company in November, telling them to keep it on their Watch List. In early February, the technical indicators told us to buy and we added it to the portfolio.
Tetra Tech’s sales are growing about 20% annually, hitting $1.25 billion net revenues last year. Roughly 70% of sales come from resource management–work that ranges from consulting for the Port of Los Angeles on how to become less polluting to optimizing water resources for the U.S. Agency for International Development in Afghanistan.
The other 30% of work comes from engineering work, like consulting on wind farm locations for T. Boone Pickens and designing Manhattan’s 550,000-sf ultra-ecoconscious Visionaire building. The Intergovernmental Panel on Climate Change uses Tetra Tech’s proprietary computer models to predict the impact of global warming.
Right now, the company is helping Panama restore water quality in the Canal Zone and designing and supporting the extension of a commuter rail in Boston. In the first quarter of its fiscal 2009, the company booked its largest number of orders ever to build an order backlog of $1.8 billion.
Right now, shares are still looking good at 22, building a base and showing signs of strength. As the stimulus money works its way to the federal agencies and local governments that have long used Tetra Tech, as well as the corporations looking for the expertise to go Green, shares should act well.