Despite $50 oil, cleantech capital markets on track for a record year: Raymond James

From New York, Raymond James energy analyst Pavel Molchanov writes, “Despite the headwinds of low energy prices, clean tech capital markets activity will likely set a record in 2015. In our clean tech update from January, we pointed out that the U.S.-listed clean tech universe’s oil price exposure can be broadly segmented into three “buckets.”

“Roughly 20% of the companies are petroleum substitutes and thus have a direct linkage to oil prices; 60% have only a superficial or derivative connection to oil prices; and 20% do not have any connection to oil prices, not even in a theoretical sense. While even stocks in the latter two categories sometimes trade in tandem with what’s happening in the oil market – showing, if nothing else, occasional sentiment-driven irrationality – the past seven months provided clear-cut evidence that the public markets look past short-term oil price swings when evaluating clean tech

“The message here is not that investors are falling all over each other to write big checks to every clean tech company that asks. That is emphatically not the case. But in the aggregate, this is shaping to be a good year to raise capital – again, notwithstanding the sentiment-related headwinds of low oil prices. While this statement does not hold true 100% of the time, the public markets for the most part recognize the fact that clean tech companies are not in the oil business, and even when they are competing in some sense with oil, their economics are almost never 1:1 correlated with oil prices.”