Duncan Stewart: Green investing and Timminco
- October 15, 2007 11:09 AM |
- By Michael Hlinka
Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).
By Duncan Stewart, director at Deloitte Canada Research in Toronto
(Listen to the original audio)
As part of this green investing column it's not really my job to comment on share prices and whether they're cheap or expensive and stocks are going to go up or go down.
But, I think it is worthwhile taking a look at companies that are doing really well in this space. One such might be a company called Timminco. This is a Quebec based company. It's kind of an interesting story.
If you looked at the beginning of this year it was trading at around 30 cents, which is penny stock territory. As of sometime earlier today it was trading at $18 Canadian, which...let me do the math...works out to about a 6,000 per cent appreciation. That's a pretty good number in and of itself. It's also got a $1.8 billion market capitalization, which means at some point if it maintains that level and the TSX starts looking at stocks for inclusion it will probably go onto the big index.
The interesting thing - as many of you know - is that solar power is very popular these days. So popular that people who make solar cells are having trouble getting enough of the silicon that goes into those cells. Now it gets a bit complicated here. Most of the sources of that silicon are what is called 11-9's purity which is that they are 99.99 pure. That's the sort of stuff that goes into semi-conductors that companies like Intel use. But, you don't need that level of purtiy for a solar cell. You only need about 6-9's. So they actually spend a lot of money making ultra pure silicon and then adding stuff to make it less pure. That doesn't make a lot of sense.
What Timminco seems to have done - and it has three large supply contracts with people who make solar panels - is that they took 2-9's metallurgical silicon and they upgrade it to 5-9's. That's good enough for many kinds of solar cells. I think it's one of those great Canadian technology stories. It's not about us going out and inventing something radically new. It's taking something we already know how to do, which is make silicon, make it just a little bit purer and solve a very real problem.
Solar power is not going to be the only solution that the world needs as it moves towards green energy, but it will be part of that solution. It's great that a Canadian company was able to come up with an answer to one of the world's pressing shortages.
-- Duncan Stewart
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