Long term Trends: Part 4: Cleanup and Waste Management

We expect these trends to continue:

1. Global Industrialization produces more waste by-products.
   
2. High Energy Prices encourages use of Nuclear Energy. Nuclear Waste is a by-product.
   
3. Waste is an alternative energy resource. There is Waste to Energy conversion and even Methane Gas Capture
   
4. Recycling plays an important role as commodity prices (materials) continues to remain expensive.

There are additional current factors:

1. There are companies in this group near their current 52 week high.
   
2. This is a good area to be in at this part of the cycle and beyond.
   
3. There is recent merger and acquisition activity. Allied Waste (AW) and Republic Services (RSG) are in the process.

Some of the Industrial and Environmental Cleanup Companies and Waste Management Companies

1. American Ecology (ECOL)
   
2. Clean Harbors (CLHB)
   
3. Energy Solutions (ES)
   
4. Waste Management (WMI)
   
5. Allied Waste (AW)
   
6. Republic Services (RSG)
   

Oil in the Arctic and Ice Road Truckers

Gas prices are going through the roof.

One of the reasons for this is the lack of supply.

However, I was reminded recently after watching the Discovery Series "Ice Road Truckers" that there is a lot of untapped oil in the Arctic Region. Some claim that one quarter of the world's untapped oil and gas reserves lie there.

Aside from investing in integrated oil companies such as Exxon-Mobil (XOM) or Conoco-Philips (COP), investing in oil services and oil exploration companies could be profitable.

There are Oil Services and Exploration Companies such as:

1. Schlumberger (SLB)
   
2. Halliburton (HAL)
   
3. Transocean (RIG)
   
4. National Oilwell Varco (NOV)
   
5. Nabors (NBR)
   
6. Ensco International (ESV)
   
7. Petroleo Brasileiro (PBR)

Canada Oil Sands

Canada also has the largest Crude Oil reserve, but much of it is in Oil Sands which may be more expensive to extract. But given today's high energy prices, it is worth it.

Canadian Natural Resources (CNQ) and Suncor (SU) might be good plays on this.

Over the long term, Canada itself, which is rich in natural resources, could be a very good country to invest in. The ishares.com ETF EWC might be a good play to profit from a Canadian boom.

Ice Road Truckers

"Ice Road Truckers" is a History Channel Show (owned by A&E Networks) that features Semi Truckers driving large loads in the Arctic Circle and the Canadian North. During the winter months, the Lakes and Arctic Ocean freezes, allowing truckers to drive above the frozen lake or ocean. The main items they are transporting are either mining equipment or oil equipment. This reminded me that there is a growth area in oil exploration and services in areas such as the Arctic.

Don't Whine About Oil Prices, Profit from It (Or at least Hedge)

In today's CNBC Show "Mad Money", Jim Cramer tells viewers to try to profit from increasing oil prices rather than "freak" out over the price of gasoline.

Jim Cramer pointed out three reasons why oil prices are high:

1. Oil Fields are Drying Up
   
2. It is more difficult to find new oil and get it out of the ground.
   
3. Demand for oil is growing very fast especially in China, India and the rest of the Developing World.

Jim Cramer then used this introduction as a way to introduce some wildcat companies, those companies who are looking for oil.

Hedging For the ETF Investor

Some investors may be mainly ETF investors, and choose not to spend time picking individual stocks.

One way to hedge or profit against rising oil prices is to invest in the ETF with the symbol "USO". USO has a high correlation to the price of oil. USO mainly reflects "the spot price of West Texas Intermediate (WTI) light, sweet crude oil."

For the Stock Picker

For the stock picker, there are many ways to profit from rising oil prices.

We highlighted the different ways and selected companies in Part 1 of the Long Term Trends: Energy, Oil, Coal, Nuclear, and Cleanup.

Home Entertainment Content Overload Will Keep You at Home

How can we leave the living room?

We can see that the Analog to Digital Living Room Long Term Trend is in place as people are upgrading to High Definition Digital Television, [Corning Glassware (GLW) is a play on this.] and installing Home Theater Systems [Dolby (DLB) is a play on this]. Content providers such as Comcast (CMCSA), DirectTV (DTV), and the Dish Network (DISH), also help keep people in their seats.

Now there are even more ways to keep people in their living rooms.

DVRs, or Digital Video Recorders, allow users to record and watch their favorite shows, even in high definition. These devices are very user friendly, and users of products such as Tivo (TIVO) have a cult following. The NDS Group (NNDS) is also another play on this.

Tivo has recently teamed up with Amazon.com (AMZN) to provide a service called Amazon Unbox, that allows movies and shows to be directly downloaded from Amazon to the Tivo DVR.

Netflix (NFLX) and BlockBuster (BBI) offer another alternative to home entertainment. These companies ship DVDs by postal mail and provide another source of home entertainment.

Netflix (NFLX) recently teamed up with Roku. Roku provides a special set-top box that allows subscribers of Netflix to stream a selection of movies directly to their television (which could be a widescreen High Definition Television). [I recently tried out the Roku system, and it is easy to setup and convenient and there are no extra service fees from Netflix. Quality at this time is close to the VHS level, but streaming is very good using broadband.]

Apple (AAPL) has attempted a similar type of Set Top Box with AppleTV but that product has not taken off.

Gaming consoles, from makers such as Nintendo (NTDOY.pk), Microsoft (MSFT), and Sony (SNE) also provide even more reasons for people to stay in their living room.

With all these forms of entertainment in the living room, how will people leave their living room?

Long Term Trends: Part 3: Minerals, Metals, and Mining

With the Multi-Year Globalization Trend in place, minerals and metals are in high demand. Growing economies especially in the emerging markets need minerals and metals such as copper, driving up demand.

Gold is often used as a hedge against inflation.

Specialty metals are also in demand. For example, new generations of airplanes need lighter materials that specialty companies can provide.

Companies include:

1. Freeport McMoran (FCX), Gold and Copper Company
   
2. Rio Tinto (RTP), Copper, Aluminum, Gold and other materials and minerals.
   
3. US Steel Corp (X), Steel Company
   
4. Michel Steel (MTL), Russian Metal and Steel Company
   
5. Posco (PKX), Korean Steel Products
   
6. Norilsk (NILSY.PK), Russian Nickel Company
   
7. iShares Gold ETF (GLD)
   
8. iShares Silver ETF (SLV)
   
9. Precision Castparts (PCP), Specialty Metals
   
10. Allegheny Technologies (ATI), Specialty Metals
    
11. Peabody Energy (BTU), Coal Company
    
12. Joy Global (JOYG), Mining Equipment Company
    
13. Bucyrus (BUCY), Mining Equipment Company
    
14. Layne Christensen (LAYN), Mining Equipment Company
    

Netflix (NFLX) Wants to Dominate the Digital Living Room with Roku Partnership

We all know Netflix (NFLX) as the company that provides DVDs by postal mail. Some time ago, they added a feature where you can logon to their Netflix.com site, and watch selected movies through the internet browser without affecting the normal DVD by mail schedule.

However, watching a full two hour movie in front of one's Computer will not be a good experience. People have invested much money in their couches, high definition TVs and home entertainment sound systems. The next step is delivering content, such as DVD content from the home computer and internet to the comfort of the Digital Living room.

Apple (AAPL) attempted to market a similar solution using AppleTV but this product has not taken off.

Tivo (TIVO) is offering another option. Aside from providing Digital Video Recorder Functionality (DVR), Tivo is also working together with Amazon Unbox program where users of Tivo can download movies purchased or rented from Amazon.com (AMZN).

Netflix's Solution to the Digital Living Room

Now, Netflix is part of the competition for the Digital Living Room, Netflix is also now taking this route with its partnership with Roku. For $99, Roku is providing a special set top box where special on-demand movies from Netflix can be streamed directly to your living room television.

This service will not affect the normal DVD by postal mail service of Netflix.

Will this product work? I have recently ordered a Roku box and will try it out.

More details on the Roku Netflix Player here.

The battle for the Digital Living Room continues, and let us keep track of the trends in this area.

Cow Power (Methane) Can Help Save Our Environment and Save our Future

Do not underestimate the Power of the Cow in terms of saving the environment and providing us with energy.

Cows (and a few other animals) can provide us with power and energy through their manure (the average dairy cow creates about 100 pounds of manure a day). Manure naturally releases methane gas into the atmosphere.

Companies, such as Utility Company PG&E (PCG), can take this manure and flush it into a tank or a tented lagoon, where the manure can decompose and the methane gas bubbles off, before being captured under the cover. The gas is then pumped from the digester, then purified and compressed into gas pipelines. After purification, the methane gas is the same as traditional natural gas, except that it's renewable and cleaner.

Cow Power Can Save the Environment Too

If we allowed the methane gas just to reach our atmosphere, this would be harmful to the environment. It is said that methane gas is 20 times more damaging to the environment than carbon dioxide.

PG&E

A lot of the information above comes from PG&E (PCG), the Utility Company. It has a forward PE of 12.73, a yield of around 3.60%, and a five year estimated growth rate of 7.73%. Incorporating the dividend yield in the PEG ratio, PG&E has a PE to Growth Ratio of around 1.12, which is a reasonable value.

They also provide a website:
www.wecandothis.com

and click on the Cow Power link.