Don't disregard the details

Written by Brian Hicks
Posted November 23, 2005

Dear Wealth Daily Reader,

Back in the early 1990s, when I first got into this business, I used to schedule my lunch around the same time as all the researchers and analysts I worked with…figuring if I sat around long enough, and listened closely, I'd learn a lot more in those 45 minutes than I had ever learned in half my classes in college.

You see, lunchtime wasn't only about nutritional sustenance…it was about mental sustenance. It was a time when the smartest guys in the building would sit around, pound their chests and do everything they could to disprove their respective colleagues' analyses of the markets.

These were the most sophisticated pissing contests I had ever witnessed.

But between the metaphorical jugular stabs and impenetrable walls of skepticism was a collective wealth of knowledge that was there for the taking.

So I took it!

And of all those lunches, the most important thing I ever learned was that the real money was in the disregarded details.

Let me explain...

Take the solar industry for instance.

Solar is booming. And every energy investor knows about Evergreen Solar, SunPower, Sharp and every other major solar firm out there.

But interestingly enough, whenever I mention some of my lesser-known picks - the smaller industrial solar manufacturers and specialized nanotechnology R&D outfits (some that are actually still trading below $1.00), I'm met with blank stares.

It's the disregarded details, my friend.

Early on, even while I was pushing the obvious solar plays, I was also investigating companies (not necessarily publicly-traded companies) and government organizations that had a need for solar integration. Airports needing cheaper, solar runway lighting, military installations needing off-grid installations, high-rise construction firms needing integrated solar design, agricultural outfits needing off-grid irrigation systems.

Sure, the residential solar market is growing by leaps and bounds. And everyone knows what a solar panel looks like.

But have you ever seen the inner workings of off-grid lighting systems or integrated solar building materials?

Well, you won't see these things on rooftops in your neighborhood, but these 'not-so-obvious' systems represent a significant chunk of the solar industry in general.

And that's why I've spent countless hours talking with designers, architects, engineers, lab technicians and any other individual or group of individuals that regularly create a demand in these lesser-known markets.

Go To The Source!

When I was at the Green Build conference last week, I recognized a few writers I've worked with in the past. Looking like starved turkey vultures, they spent the majority of their time only circling the booths occupied by publicly-traded companies.

Sure, I was there too.

But that only gives you the particulars of the 'here and now.' We're looking for the 'here, now and most importantly - the tomorrow!

So if you really want to know where green building is heading, and more importantly, which companies and products are in high-demand - you have to go straight to the source - the engineers.

Tomorrow's Green Building... ready for 2006

Last week, after meeting with Interface Engineering, Inc., an engineering firm from Portland, I came across the designs for a new 'green' medical high-rise building that many are calling a model for green innovation.

Operating as the "Center for Health and Healing" for the River Campus of Oregon Health and Science University, the building program includes:
A 16-story, 400,000 square foot building that will house physician practices, outpatient surgery, a wellness center, research labs and educational space. A three-story underground parking garage will also provide 500 new parking spaces for patients.

Eight levels are devoted to physician practices, surgery and imaging across a wide range of specialties and programs. They include dermatology, family medicine, internal medicine, spine neurology, neurosurgery, cardiology, oncology, surgical oncology, digestive health, ENT, plastic surgery, physical therapy, ophthalmology, urology and fertility.

Three floors will house a comprehensive health and wellness center. The center will include a full gymnasium, a four-lane lap pool, a therapy pool, cardio and weight training areas, multipurpose studios and a day spa.

Four levels are dedicated to educational and research activities, including laboratory space for the biomedical engineering program.

The ground floor will house retail space, including a pharmacy, optical shop and café.

Oh, and did I mention that the entire net mechanical and electrical systems costs for all this are ten percent under the $30 million allotted based on a conventional design?

Even before the building sees a penny of energy efficiency measure (EEMs) savings, they're already a head of the game!

I'll get to these EEMs in a second - because they are beyond impressive. But first, let me show you just some of the advantages of this 'green' design. Advantages that further validate green building's future as the standard for construction and development in the very near future.

The design of the high-rise includes the following:
61% more energy efficient than Oregon Energy Code requirements
100% on-site rainwater re-use system
10% net reduction in budgeted HVAC capital costs ($3 million savings)
Natural ventilation
Radiant heating/cooling with thermal energy storage
300-kW output from five microturbines
On-site sewage treatment, with effluent used for toilet flushing and irrigation
Solar photovoltaics integrated with the south-facing window overhangs
50% + reduction in total use of potable water in the building

This Payback Ain't A Bitch!

One of the chief advantages of green building can be found in the payback of energy efficiency investments.

And in this particular project, it only took five energy-efficient measures to provide more than 68% of the net capital cost savings!

That's huge!!!

Some of the building's paybacks come from high-efficiency glazing, a 300-kW microturbine plant, energy-efficient transformers, a 60kW photovoltaic array and optimized lighting fixture selection and layout.

Of course, water and energy savings are the big motivators for investors here.

And it is through efficient, integrated design that developers will soon have no alternative but to go this route.

The integrated design of this building in particular has allowed for a 60% + reduction in water use, through both demand-side and supply-side measures.

The building also boasts a massive reduction in energy use.

Compared with a conventional building of the same size and similar activities, the River Campus building expects to use 61% less energy every year!

So what does all this mean for us?

It means the publicly-traded companies that manufacture the products which enable these massive cost savings are in for a steady increase in sales and revenue.

And the time to grab shares of the more technically-advanced green building suppliers is now.


Which companies are designing integrated solar systems for green buildings? Which companies are manufacturing on-site water treatment technologies? Which companies are supplying paints, textiles and carpets? Which companies are supplying lighting fixtures? Which companies are manufacturing the microturbines?

Currently I'm putting together an analysis of one particular company that I believe is in the perfect position to profit from the green building momentum.

This company has already installed its technology in a number of green buildings, it has one of the most impressive backlogs of orders I've seen yet and it looks like this is the 'go to' company for this particular green building sector.

I'll have more on this one in the coming weeks.

Until next time…

Jeff Siegel
Editor, Green Chip Stocks

P.S. Next week I’ll have a new recommendation for you. Since Spectrum Organics (SPOP – OTCBB) is getting acquired by Hain Celestial… and Spectrum is up 56% since our recommendation in Wealth Daily, I think it’s high time to replace Spectrum with a brand new organic food play.

This stock, trading for $2.75 a share, has never finished a year down since it’s been public. Members of Green Chips Stocks are up 120% this year alone in this stock… and I think it’ll go up 509% to $16.75.

Next week I’ll have a full write-up for you. Don’t miss it.

In the meantime, I urge you to become a member to my red-hot investment service, go to: [Green Chip Stocks]