Nacel Energy Corporation (NCEN.OB)

Dear Bottarelli Research Member,

We kicked off another week of falling stock prices on Monday and Tuesday, triggered by the failure of IndyMac bank which was taken over by the FDIC. This sparked a run in the banking stocks reminiscent of the Great Depression. Very concerning.

Luckily, we were able to use this early-week selling pressure to lock in great profits on our S&P 500 Ultra Short August 75 Calls (SBJ HW). If you recall, we entered this protective position last Monday for $2.65 and watched it soar all the way up to $5.50 on Tuesday, good for a quick and easy 107.55% return. In fact, this protective position worked out so well, Bryan sent out a special mid-week alert just to ensure that you locked in your profits.

With everyone talking about “doom and gloom,” our trading instincts told us that we now had the perfect set-up for a market bottom. And on Wednesday and Thursday, the market responded with a swift +476 points of upside. Very encouraging. So, with the market panic in full motion early this week, our strategy of buying into this massive sell-off now appears right on the money.

Now, as I mentioned to you last week, I spent a considerable amount of time meeting with my close “inner circle” network recently. Throughout our in-depth market discussions, the overwhelming topic was the major push for anything that’ll cut our dependence from OPEC. In fact, we all believe that our country’s leaders better stop with all the lip service (or promise of change) and implement an Alternative Energy Policy. We desperately need to get alternative energy moving in high gear right now! Don’t get me wrong. The world’s growing population will fuel a constant demand for oil and gas, but now (more than ever before) alternative energy is being sought out across the planet.

SIDE NOTE: It deeply troubles me that we’re paying countless billions to fight a war in Iraq, and then we turn around and pay exorbitant oil prices back to the same groups we’re fighting. I’ve mentioned to Bryan in our private talks that I’m mad as hell that oil-rich nations are now using our own cash to buy up American assets like our banks, our companies, and our land. One big step to correcting this troubling situation is to find practical and mainstream uses for alternative energy sources. I truly believe we have the resources, technology, and capability to make it all happen. It’s just a matter of time.

That’s why I’ll continue to position our small-cap ledger in the top alternative energy plays. One such investment play that stood out during our discussions was the emergence of wind power. As a young boy growing up in a farming community, I remember using windmills for irrigation, running water, and even electricity. Now this technology has come full circle, and this leads directly into today’s newest pick.

This week’s gem is a leading wind power company with operations in Texas. This location is significant because just recently, Texas surpassed California as the country’s wind-power leader. And with two major wind-power projects in Texas, this small company is leading the charge. In fact, they unveiled two West Texas wind farms totaling 40 megawatts (MW). One is called Blue Creek, located north of Amarillo, and the other is called Channing Flats, in Moore County.

They’ve also entered into a joint venture agreement with Ridge Partners, an established developer of wind-power infrastructure in the Caribbean and Latin America. Through this partnership, they have a goal of developing 600 megawatts of wind energy power.

This week’s gem is also using project design software called Wind Farmer to optimize wind turbines. Using their proprietary methods, this company offers maximum energy production while meeting all environmental, technical, and construction constraints. This technology is truly the best in its class, which is why it’s already being used by Florida Power & Light, Coopers & Lybrand, GE Wind Energy, Alliant Energy Wind Connect, Babcock & Brown, British Energy, Edison Mission Energy, Conoco, and Tokyo Mitsubishi. That’s quite an impressive list of companies, and it tells me that this week’s little gem has now joined the big leagues.

Something else that caught my attention was their creation called Windvest, which is a highly innovative capital structure that enables them to successfully joint-venture with local wind-energy developers, expedite time lines, and improve project economics. This is the very first time I’ve heard of a wind-power structure like this in the U.S. This could truly be huge for this growing wind-power company, as state after state (a total of 24 that I currently know of) have mandated wind-power technology. Like I’ve been saying, the time has come!

Another important point: Early-stage companies typically burn through cash in their development stages. And now that financing has become very hard to obtain, this poses a big problem for small companies across the nation. But that’s not the case here. You see, this company just received capital funding commitments totaling $3.2 million to finance the development phase of their new 80 MW wind-power turbine construction.

Plus, their balance sheet boasts total assets more than 50x total liabilities, no current debt, and virtually no long-term debt. Folks, this is about as good as any company could ask for. They’re in better shape (speaking both financially and in terms of future potential) than 90% of other stocks you can buy today. And if that weren’t enough, my main man T. Boone Pickens just announced that he’ll begin spending $58 million in new advertising campaigns to educate the American public about the “Pickens Plan,” which is a blueprint on how the country (in less than 10 years) can reduce our oil dependence by one-third.

Many think Pickens is doing this for his own personal take. But I think he’s trying to wake up the bureaucrats, offer our country a solution that we desperately need, and make some money at the same time. In my book, that makes him a true red-blooded American. I think we should all pay very close attention to him, because he’s the master at isolating small companies on the rise. For example, our play on InterOil (IOC – AMEX) pulled some quick profits for our small-cap portfolio, and IOC was a pick of his. Today, it’s time to continue riding this profit train with this small and growing wind-power company.

The company is called Nacel Energy Corporation (NCEN.OB).With T. Boone launching his huge advertising campaign, I feel wind power could receive a lot of investor attention. Plus, NCEN has pulled back from it’s $5.00 high, and we can now pick up shares for under $2.00. Let’s use this weakness to our advantage and add shares to our small-cap ledger now! If NCEN hands you a quick profit between 30% to 50%, be sure to lock in these quick profits. Bryan will give you specific sell instructions below.

UPDATES

Potash North (PTNHF.PK) & Potash One (KCLOF.PK): Our two junior potash companies have pulled back, once again giving you a huge window to jump in. You can bet these will snap back, but what makes them even more interesting is the fact that globalization (and the need for food) is going to take them each much higher. Add to each of them now – you’ll be glad you did. Buy.

RAM Energy Resources (RAME – NASDAQ): Here is another of our recent additions that the market has taken down. But their application to upgrade from the NASDAQ Capital Market to the NASDAQ Global Market was just approved, and this new listing should be viewed as bullish. RAME has exposure to a powerful business segment that’s set to take off, so I continue to feel that this little gem is positioned to do extremely well in our small-cap portfolio. Buy.

Brigham Exploration (BEXP – NASDAQ) & Northern Oil & Gas (NOG – AMEX): After offering you new buying guidelines last week, BEXP and NOG are finally pulling back. Mark my words, the Bakken Oil discovery could be a major discovery here in the U.S., so I’d like to re-establish a position in both names once the selling pressure is over. When it’s time to officially strike, I’ll alert you in a forthcoming small-cap alert. Hold.

Metalline Mining (MMG – AMEX): Ourjunior mining play recently announced additional drilling results from their Sierra Mojada project in Coahuila, Mexico. According to their reports, Hole D1080318 intersected 6 meters of mineralization between 144 and 150 meters, with an average grade of 350.3 grams silver per tonne, 2.50% copper, and 18.20% zinc. This is good news – and it continues to foreshadow the strong potential in MMG. I feel like the recent market sell-off is giving us a unique opportunity on a company that has proved out (what could be) the largest zinc mine in the world. I view this as one of the best junior mining companies available, and I consider this a bargain basement buy. Buy.

Evergreen Solar (ESLR – NASDAQ): This week, ESLR announced a long-term relationship with IBC SOLAR (the largest PV distributor in the world). This contract not only represents the single largest contract in ESLR’s history, but it’s also one of the largest contracts ever between a panel manufacturer and a distributor. This is huge news for ESLR, and I hope you have been using the market weakness to add to your position. Make no mistake, our solar plays are going to attract a lot of attention in the coming months. Therefore, ESLR remains a buy. Buy.

Before signing off, I’d like to share with you a quick personal note. Another hot topic at my inner circle meeting was one of “wealth preservation” and “safety.” As a member of Bottarelli Research Small Caps, I want to ensure that you’re on guard and protected in this market environment. Therefore, I would like to tell you that some members in my group are moving their assets over to EverBank, which allows you to invest in any currency that you want. My group especially favors the Swiss Franc, the Australian Dollar, and Brazilian Real, and the Mexican Peso. I’m not a currency expert, so please do your own due diligence before making any currency moves, but I felt obligated to share with you the opinions of my inner circle on this important topic.

Another note: The amount of high-quality stocks that have come crashing down over the last 2-3 months is truly remarkable. The old market saying tells you to “buy low,” yet 9 out of every 10 investors still cannot properly apply this simple plan. So let’s remain calm and patient, knowing in the back of our minds that the time to strike will soon be upon us.

In the meantime, I’ll be digging into a lot of exciting information I received from my travels. In the weeks ahead (once my own due diligence is complete), I’ll be sharing the very best ideas with you here in Bottarelli Research Small Caps. Very exciting developments lie ahead, but until then, be sure to give thanks for the abundance in your life.

Sincerely,

“Wind Is The Fastest Growing Source Of Energy In America And The World”

Right Now, The United States Harnesses More Than 10,000 Megawatts Of Electric Energy From Wind; Enough To Meet The Needs Of 2.5 Million Average American Homes. All Told, The Department Of Energy Predicts Wind Energy Could Provide As Much 20% Of America’s Energy Needs.

First and foremost, congrats on a nice “protective” winner on your S&P 500 Ultra Short August 75 Calls (SBJ HW).I hope that you received my special alert on Tuesday and locked in a strong return.

Secondly, I’d like to briefly offer my viewpoint on the U.S. Banking system, with a particular criticism of the FDIC’s $100,000 deposit guarantee.

In my view, it’s too risky to have any cash holdings in a bank over the FDIC insured limit of $100,000. Furthermore, I feel that the $100,000 guarantee is far too low.

After all, this guaranteed limit was implemented back in World War II. At that time, $100,000 was more than enough to live comfortably on. But in today’s marketplace, this figure is completely out-dated. Combine this miniscule guarantee with the credit and housing crisis, and we’re truly facing some unprecedented financial times.

Now I admit. Perhaps it’s fear-mongering on my part. Or perhaps it’s the way the Internet rapidly accelerates the dissemination of news that makes it feel like the sky is falling. But we cannot ignore the fact that banks are failing.

Imagine, for a moment, if you had your life savings of $500,000 at IndyMac Bank. Last Friday, there was a run on IndyMac, which forced them to close their doors 3 hours early. Their entire banking system was shut down. Insolvent.

Come Sunday, the FDIC assumed control of the bank, guaranteeing any account of $100,000 or less. That meant that your entire life savings of $500,000, which was in your account on Friday, was only guaranteed for $100,000 the next Monday. $400,000 gone, just like that! Now, that’s truly terrifying. I’m sure glad I’m not FDIC Chairman Sheila C. Bair right now, that’s for sure. Times look bleak, and more banks will certainly fail in the coming months.

In response to this IndyMac failure, Bottarelli Research member J.S. wrote in to ask, “Dear Bryan – thanks for your great service. You indicated your worries about banks failing, but what about brokers? There are limits to the insurance they offer so do you see a need to scatter one’s funds across more than one broker? I know there were concerns about E*Trade a few months ago. Thanks in advance for your thoughts.”

My response was as follows…

“I am not concerned about the brokers at all. In fact, I feel they will be the beneficiaries of all of the banking mess. After all, a company like Charles Schwab has no sub-prime exposure (at least none that I’m aware of). E*Trade is the only broker that I know of that was involved in sub-prime loans. Aside from E*Trade, brokers appear much more stable than banks like National City, Bank of America, Citigroup, Washington Mutual, and others. In fact, SCHW could be a nice LEAPS or call options play soon.”

So on the topic of wealth protection, I recommend maintaining accounts less than $100,000 at any bank. And if you’re looking for a safe and stable place to move your funds, having them in cash at any established broker makes the most sense to me.

Having said that, let’s move into today’s new small-cap pick.

I must tell you, I continue to love the idea of picking up top alternative energy companies at severely-depressed stock valuations. Last week, we scooped up a budding solar company in Ascent Solar Technologies (ASTI – NASDAQ). And this week, we’ll establish a position in the wind-power sector with Nacel Energy Corporation (NCEN.OB).

Headquartered in Casper, Wyomin, Nacel Energy Corporation develops renewable energy from wind using WindVest, a proprietary capital structure that enables the company to joint-venture with local wind-energy developers in the United States.

The company is also involved with Community Wind, a utility-scale power generation platform of wind turbines that generates 80 megawatts of new capacity – enough energy to supply 25,000 homes.

As Mark mentioned above, Texas is now the best region in the country to install wind turbines. According to a new report by the Global Wind Energy Council, Texas’ 4,356 megawatts of wind power are nearly twice the wind power capacity of their nearest rival, California.

Thanks to flat topography, constant wind velocity, and favorable access to transmission infrastructure, the Texas panhandle is the premier wind energy corridor in the United States. In fact, Texas wind farms now generate enough wind power energy to serve 1.5 million homes! (This figure was reported by American Wind Energy Association Market Report, dated January 2008.)

That’s why West Texas has seen such explosive wind power growth. Constant wind, flat range land, and an extensive network of high voltage lines offer all the catalysts that’ll make Texas a premier wind-power generator for years to come. In just the last 120 days, new West Texas wind power projects worth more than half a billion dollars have been announced. Florida Power & Light, Shell, and BP also have wind energy projects underway in the region.

In fact, on Thursday July 17^th, Texas utility officials gave preliminary approval for a $4.9 billion plan to build new transmission lines to carry wind-generated electricity to urban areas (like Dallas). Experts are calling it the biggest investment in clean and renewable energy in U.S. history,and Nacel Energy is a small and growing company in the heart of this Texas wind-power boom. That’s why NCEN is such a powerful investment.

You see, Nacel is one of the only pure wind-power generators in the country – and not many investors even realize that they went public last December. They just unveiled two West Texas wind farms totaling 40 MW, putting them among the first companies in the nation to develop utility-class wind-power projects. And with its expanding pipeline of wind projects, Nacel Energy is on track to develop 80 megawatts of new wind energy by 2010. But let’s back up a moment and dig deeper into the technology that drives wind power.

You probably don’t realize this, but the modern wind turbine was invented in 1887 by the co-founder of General Electric, Charles Brush. He built a large wind turbine in the backyard of his Cleveland home that generated clean, renewable, energy for more than 20 years.

Fast forward to today, and recent advances in turbine technology have now made wind energy cost-competitive with fossil-fuels. That’s why 24 states have now implemented legislation to speed up wind energy development. Today, wind is the fastest growing source of energy in America, making it an important part of the solution in our nation’s quest for energy independence and a clean environment.

How does a wind turbine work? Here’s the process…

• Kinetic wind energy is converted to electric energy when a rotating wind blade transfers this motion into the “nacelle” (which is where NCEN’s company name is derived from). Inside the nacelle, the slowly rotating shaft enters a gearbox that greatly increases the rotational shaft speed. The high-speed shaft is connected to a generator that converts the rotational movement into electricity at medium voltage (a few hundred volts).
• Electricity flows down heavy electric cables inside the wind turbine tower to a transformer, which increases the voltage of the electric power to the distribution voltage (a few thousand volts).
• The voltage power is then sent to an electrical grid substation, where the voltage is again increased dramatically to transmission-voltage power (a few hundred thousand volts). And from this point, it’s transported (via long distance transmission lines) to cities and factories.

As you read this today, the United States harnesses more than 10,000 megawatts of electric energy from wind. That’s enough to meet the needs of 2.5 million average American homes! But that’s just the beginning. The Department of Energy predicts that wind energy could provide 20% of America’s total energy needs. That’s a major statistic.

Plus, the economics of wind energy are getting better and better. The cost of wind energy has been declining steadily for 25 years. In fact, the cost of energy produced from wind turbines is now competitive with mainstream power technologies (such as coal and hydro) and is actually less expensive than gas or nuclear.

While the cost of natural gas has increased steadily since 1996, the cost of wind energy continues to decline. In fact, wind energy costs one-sixth what it did in the 1980s, and the cost is expected to drop another 25% by 2010. Plus, these price decreases have also come during a time when the installed wind energy capacity has doubled three times over. So the technology keeps getting better while the prices keep falling. And remember, that’s not even factoring in any environmental costs!

Put it all together, and that’s why many states are now mandating that a certain percentage of energy consumed is obtained from renewable sources like wind. This makes a very strong case for a small and growing Texas wind power company like Nacel Energy.

With a market cap of only $40.66 million, Nacel Energy Corporation (NCEN.OB) looks like a truly explosive winner. Shares hit a 52-week high on May 20^th 2008 of $5.30 and a 52-week low on January 7^th 2008 of $0.79. With the stock currently trading for only $1.83, the time to add a position is now! So on that note, here is your latest small cap pick.

PLAY: Buy shares of Nacel Energy Corporation (NCEN.OB) at market, good for the week. In terms of position management, if you see a return between 30% and 50% above your entry price, take half of your profits off the table.

Sincerely,