Raser Technologies, Inc. (RZ)

The only explanation I have as to why I'm re-upping on Raser is that I'm bat@#$! insane! Thus far, this company has not shown that it's business model can be successful, nor has it given much evidence that it can foreseeably turn a profit in the future. While my portfolio is up over 75% over the past nine months, this has been one of my biggest losers. So, as you might realize, I'm a bit frustrated with RZ right now.

All the same, the short-sellers and the Raser bears are missing a lot of important things about this company. For one, Raser is breaking new ground here. They are the first company to experiment with UTX's Pure-Cycle technology for geothermal power. They've had some success thus far, but the problem has been much-slower-than-anticipated development. In a strange way, however, this might not be such a bad thing.

Raser's "know-how" in implementing these large scale geothermal projects using Pure Cycle is worth much more than the market is giving it credit for. It's taken years to acquire this "know-how" and if they are eventually successful, they are going to have a huge moat. That's one reason I like Raser more than the solar companies, which all compete in a very crowded market, in what is arguably a "commoditized industry". Raser is all alone in the lower-heat geothermal power generation market. (They do have strong competition in their motors & drives division, however.)

The other thing I like here --- I believe the market has consistently underestimated geothermal power as an alternative energy sources and has consistently overestimated solar as a viable energy sources. Solar is sexy. For some reason, geothermal is not. Yet, geothermal is light years ahead of solar in many ways. The only real issue is that geothermal is limited to certain thermal hot beds around the world. However, the Western United States from around Utah/ NW New Mexico all the way to the Pacific Northwest has great potential for geothermal. Raser is precisely the type of company positioned to take full advantage in the future.

There are a lot of risks with Raser including high debt, a huge potential for problems and delays in their development, whether or not they can make this profitable, etc. No doubt about it --- this is a classic high risk/high reward endeavor. I like RZ enough to take a gamble on the long-side, but I'll be the first to admit --- I could be very wrong. Still; it might be worth the 100% downside in order to reap upside potential of 500% - 1000%+. Then again, maybe I'm just bat@#4! insane.