A Basket of Green Stocks to Buy

NEW YORK (TheStreet) --

What We Mean by "Green Stocks": Lithium battery makers and companies further up the supply chain

Why Buy Them: Lithium batteries -- already growing increasingly popular for powering numerous electronic devices -- are expected to accelerate in popularity with the growth of electric or "green" vehicle demand, currently being driven by governments globally through incentive programs. Several governments aim to deploy no fewer than 1 million electric vehicles.

Needham investment firm's research suggests that the lithium-ion passenger vehicle market could accelerate to an estimated $24.7 billion by 2015 from about $200 million in 2010. This forecast is based on announced vehicle build rates and factors in battery-pack size and cost-reduction estimates to reflect economics of scale. Needham expects global electric vehicle production to reach 750,000 units by 2013.

Investment Strategy: While exposure to this emerging sector could be recommended for those investors with an appetite for risk, a measured approach is prudent. Thus, our basket of stocks offers diversity in market cap, business segments and risk allocation. To help explain the fundamentals of each stock, we have recruited the analysis of Tim Collins, a financial adviser at TangleTrade and a RealMoney contributor.

Up Next: See what's in the basket.