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How to profit from wind power stocks with less risk

The seeming attraction of wind power stocks is obvious — these companies operate (or make parts for) wind turbines, which offer a source of clean, renewable energy that can replace fossil fuels like oil and coal. However, like many alternative-energy stocks, wind power’s potential has risk to match.

For example, the government of Ontario’s recent decision to put a moratorium on offshore wind farms illustrates the mounting political opposition to new wind developments.

(Our Special Report, “3 Little-Known Alternative Energy Companies that Could Double or Triple During the Obama Administration,” covers all you need to know to find the profit-making opportunities in wind power stocks. You get this Special Report at no cost when you take a one-month free trial to our Wall Street Stock Forecaster newsletter. Read on for further details. If you’re already a Wall Street Stock Forecaster subscriber or Inner Circle member, click here to access this report right away.)

One of the main problems with wind power is that varying wind speeds cause its electricity output to fluctuate. In many areas, the wind is stronger in the daytime, when demand is lower, and dies down in the evening, when consumers use more appliances. As well, electrical power can’t be stored efficiently, so to make economic sense it must be used when it is produced. As a result, utilities must maintain back-up power capacity that is equal to their reliance on wind power.

Wind power stocks also face high construction costs. These include the cost of the turbines themselves, plus buying or leasing the necessary land. Installation can also be expensive, depending on the terrain and distance from the power grid.

Not surprisingly, wind projects need government subsidies to be profitable. However, the future of these subsidies is uncertain as governments around the world struggle with high budget deficits.


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This stock lets you profit from rising renewable power demand with less risk than wind power stocks

While some governments are cutting back on new wind-power projects, others, such as China, are increasing their investments in wind farms and other renewable-energy projects.

Our research department has zeroed in on one company that’s well positioned to profit from this trend with much less risk than investing directly in wind power stocks. You can read all about this exciting stock in our FREE report, “3 Little-Known Alternative Energy Stocks That Could Double or Triple During the Obama Administration.”

This Switzerland-based firm makes parts that help wind farms integrate with existing power grids. But its products have many other uses, as well. That broad base of business helps cut its risk.

What’s more, this company recently bought a U.S.-based maker of electric motors that have a wide variety of industrial uses, such as conveyor belts, fans and blowers, and fluid pumps. That further broadens the company’s base, and lets it profit from rising industrial activity as the U.S. economic recovery continues. This company’s strong balance sheet and rising order backlog only add to its appeal.

This stock has risen 46.1% in the last 8 months, but still trades at a reasonable multiple to earnings. We think its biggest gains still lie ahead.

You can get our in-depth analysis, including our clear buy/sell/hold advice, on this stock in “3 Little-Known Alternative Energy Companies that Could Double or Triple During the Obama Administration.” What’s more, you get this report—and 5 other in-depth investment reports—absolutely FREE when you take a one-month free trial to Wall Street Stock Forecaster. You have no risk and no obligation. Click here to learn more.

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