Posted: July 16, 2008

At first glance they seem to have nothing in common.

Spain’s Telvent GIT S.A., which trades on NASDAQ, is an information technology firm that has a system for controlling the flow of traffic. Massachusetts-based Kadant Inc., which trades on the New York Stock Exchange, makes and sells paper recycling equipment. Nevada-based Ormat Technologies Inc., which also trades on the Big Board, makes and sells equipment for generating electricity from waste heat.

But look closer, the way Rafael Coven, manager of the Cleantech Index, does, and what you see are three companies all engaged in the energy efficiency business. Telvent helps cars run more efficiently. Kadant helps the papermaking industry run more efficiently. And Ormat improves the efficiency of electricity generation.

Coven says that because energy efficiency companies come in all shapes and sizes, investors may not realize the key role they will increasingly play as the world is forced to do more with less, to expand the global economy in the face of limited supplies of oil, coal and natural gas. As many experts have recently noted, energy efficiency is the only “quick fix” to America’s and the world’s energy woes.

But unlike, say, companies that make solar panels or wind turbines, energy efficiency companies can hide in plain sight, according to Coven. “There are energy efficiency solutions companies for every business sector,” he emphasized during a lengthy conversation with EnergyTechStocks.com.

Coven described Telvent as a “very, very interesting company with really good stuff.” He said Kadant “is very much under the radar.” He thinks Ormat, which gets attention as a geothermal power developer, is equally interesting for its “recovered” energy power plants.

Among other energy efficiency firms in the index Coven manages are Echelon Corp. and Itron Inc., both of which trade on NASDAQ. They make utility meters that save energy because they are “smart,” meaning they are programmable. Still another is Cree Inc., which also trades on NASDAQ. Cree is a manufacturer of light emitting dioide (LED) lighting products that, because they are super energy efficient, are expected to eventually replace all incandescent and even compact fluorescent lighting products.

Part 1 of 5 – At Least 70 Cleantech Firms Are Acquisition Candidates

Part 2 of 5 – 4 Firms That Appear Likely to Get Bought by the ‘Big Boys’

Part 4 of 5 – ‘Huge’ $ Starting to Flow Into Eco-Friendly Agriculture Firms

Part 5 of 5 – Insituform Has ‘Vast’ Untapped Market Potential