Forex

With the price of oil skyrocketing and the quest for clean alternative energy accelerating, investors who are looking to hedge their bets may find the renewable energy sector to be quite appealing. Renewable energy resources include solar energy, geothermal energy, energy from the wind or waves, energy from tides and energy from biomass.

Shares of Ormat Technologies Inc. (ORA: News, Chart, Quote ), a pure-play geothermal company, have gained nearly 50% over the past twelve months. Though the stock is now over 8% down from its 52-week high of $57.93, given the promising future for the exploitation of geothermal resources, analysts believe this stock will continue to ride high. Ormat currently trades around $52, which is 47 times the expected earnings for 2008 and 32 times next year's anticipated earnings.

Profile

Ormat Technologies, located in Reno, Nevada, is a subsidiary of Israel-based Ormat Industries Ltd. Founded in 1965, Ormat Technologies provides solutions for geothermal power, REG* (recovered energy generation) and remote power. (*Recovered energy power generation involves capturing unused waste heat from industrial processes and converting it into electricity).

The company operates under two segments -- Electricity and Products. The Electricity segment develops, builds, owns, and operates geothermal and recovered energy-based power plants, and sells electricity. The Products segment designs, manufactures, and sells equipment for geothermal and recovered energy-based electricity generation and provides related services. In 2007, Ormat derived 73% of its revenues from electricity generation and 27% from equipment sales. The U.S. accounted for 83% of the Electricity segment revenues and 28% of the Product segment revenues. Foreign operations contributed to 17% of the Electricity segment revenues and 72% of the Product segment revenues.



Earnings Scorecard


For the first quarter ended March 31, Ormat posted a profit of $10.1 million or $0.24 per share, reversing a year-ago loss of $5.8 million or $0.15 per share. The company attributed the improvement in results to better operating performance, growth in its overall generating capacity and an improvement in power prices in certain projects. Total quarterly revenues, which include revenue from both the Electricity and Products segments, were $69.4 million, up 12.3% from $61.7 million in the year-ago period.