Investment thesis
Enabling sustainability
We are initiating coverage of the greentech industry with Buy ratings on American
Superconductor and Itron and a Hold rating on Fuel Tech. In addition, we are reiterating our
Hold rating on Cree. The combination of increasingly economically viable solutions and
favorable tailwinds from resource scarcity, energy security and climate change concerns
should result in the greentech sector being one of the most attractive growth markets over
the next several decades.
Industrialization, energy security and climate concerns driving change
There are three major secular trends occurring today that are changing the planet: the
industrialization and urbanization of roughly 2B people, energy security and stability, and
global warming. Together, we believe these trends have created a perfect storm that has to
be addressed by developed and emerging countries alike. We believe the development and
implementation of greentech solutions, those that enable the more efficient and ecologically
friendly use of the word’s natural resources, is key to addressing these challenges.
Greentech investment on the rise
This perfect storm is translating into robust global greentech investment. These investments
are flowing into two sub segments -- renewable energy generation and efficiency providers --
both of which are alleviating the world’s dependence on fossil fuels. Given the strong
tailwinds, we believe investment in the greentech sector will continue its current trajectory
for the next several years.
Valuation
Discretion advised
To take advantage of this secular trend towards a sustainable society, we believe investors
should look for companies that have 1) a large and growing addressable market opportunity,
2) industry catalysts to drive adoption, 3) economically viable solutions, 4) differentiated and
defendable products and 5) a reasonable valuation. In conjunction with our analysis of each
companies’ “critical success factors” and valuation, we are initiating coverage of American
Superconductor and Itron with Buy ratings and Fuel Tech with a Hold rating. We are also
reiterating our Hold rating on Cree.
Initiating coverage of AMSC with Buy; multifaceted greentech story
American Superconductor, we believe, is an excellent way for investors to take advantage of
the increasing concerns about climate change, energy security and resource scarcity. One of
its divisions enables China-based companies to manufacture wind turbines quickly and cost
effectively, while another division is developing state-of-the-art technologies to alleviate
stress on the world’s power grids. With good near-term visibility from wind and multitude
catalysts to drive estimates higher, we are initiating coverage with a Buy rating and $34 price
target.
Initiating coverage of Itron with Buy; enabling the efficiency evolution
Itron, a technology-savvy leader in the meter, meter reading and metering software and
services industry is, in our view, in an excellent position to benefit from utilities’ increased
investment in efficiency measures. Trading at a substantial discount to its greentech peers,
possessing a stable profit stream from meters and upside potential from advance metering
infrastructure (AMI) wins, we believe Itron is a good way for more conservative investors to
take advantage of the greentech movement. Initiating coverage with a Buy and a $100 price
target.

Initiating coverage of Fuel Tech with Hold; clean coal for a carbon-constrained world
We believe Fuel Tech’s leading efficiency and emissions control products for coal-fired
power plants, coupled with electricity capacity constraints and increasingly stringent
regulatory controls, positions the company for healthy growth over the next several years.
Trading at 32x our CY09 EPS estimate, we believe shares are fairly valued and adequately
discounting the company’s long-term growth potential and near-term headwinds. Initiating
coverage with a Hold and $24 price target.
Reiterate Hold rating on Cree; at a crossroad
Cree, a leading LED (light emitting diode) manufacturer, has fallen on hard times as the
industry has started to commoditize. That said, we are optimistic that Cree’s transition from a
R&D focused chip manufacturer to a vertically integrated R&D, sales and marketing company
will position it to participate in LED growth markets such as illumination and large format
displays. Expensive on most metrics, Cree’s valuation is supported by its long-term potential
and the enthusiasm around alternative energy and LEDs. Reiterate Hold rating and $22 price
target.
Risks
Risks to our thesis on the industry and individual companies include waning government
support for renewable energy generation and efficiency measures, slowing worldwide
energy demand, faster-than-expected oil and natural gas supply growth, increasing
competition from incumbent energy, transportation, etc providers, and changing market
conditions.

Table of Contents
Investment thesis .............................................................................. 3
Enabling sustainability...............................................................................................................3
Valuation ..................................................................................................................................3
Risks ........................................................................................................................................4
Time for change................................................................................. 5
Industrialization = resource depletion + pollution .....................................................................5
Energy security .........................................................................................................................6
Climate change gaining steam..................................................................................................7
Change is inevitable ..................................................................................................................8
Greentech investment rising ............................................................ 9
Greentech investment topped $70B in 2006 ............................................................................9
Greentech investment to continue..........................................................................................10
Discretion advised........................................................................... 12
Industry market opportunity....................................................................................................12
Industry adoption/catalysts to adoption ..................................................................................12
Economically viable solutions .................................................................................................13
Differentiated and defendable products .................................................................................14
Pick winners with a reasonable valuation................................................................................14
American Superconductor.............................................................. 15
Itron .................................................................................................. 45
Fuel Tech .......................................................................................... 71