OK, so now we close out the list of “The 5 most important ‘Secret Investment Societies’ in America,” according to Porter Stansberry and the gang at Porter Stansberry’s Investment Advisory. If you’d like to see the other four, start here with the Pasadena Investment Society and you’ll see links to the others.

These secret investment societies are generally under-the-radar holding companies and investment companies that own diverse sets of businesses, some regular corporations and some partnerships. Some that didn’t make the cut for this Stansberry group, but that you might have heard of, would be Danaher, Dover, General Electric, Illinois Tool Works, and there are many, many more.

But Stansberry singled out five (well, six if you count the Berkshire Hathaway teaser, though he didn’t suggest you invest in that one) — and we’ve been sniffing them out here at the Gumshoe for the last few days. Thanks to all my readers for suggesting solutions to some of them, I love to hear your solved teasers, even on the rare occasion when your solutions turn out to be wrong — the more ideas, the better.

So — my favorite saying is, “If you want to make a small fortune in America today, start with a large fortune. Preferably an inherited one.”

Stansberry, on the other hand, says that, “If you’d like to make a small fortune in America today, we believe the only safe and easy way to do it is to invest in these 5 opportunities that I call ‘Secret Societies.'”

I still like my way better, but let’s see what Stansberry thinks we should buy.

Secret Society number three is … The California Club.

Now, unlike most of the other ones teased, there is actually a private club called the California Club … it’s a social club in L.A. and it has nothing to do with this investment teaser, of course, but it does exist. And there’s also the sandwich, which, like all things California, seems to simply take an existing concoction (the turkey club sandwich, in this case) and add avocados.

But I don’t think Stansberry wants us to buy avocado futures, or try to get into the exclusive California Club.

So what clues do we get to solve this thing? You might have noticed that I didn’t go through these secret societies in order — there’s a good reason for that, this one was harder for me than the others were, and I prefer “easy.”

Enough chattering. Here we go with the clues:

It has “large operations in California.”

Investors in this one have gotten 1765% gains since 2003. Yeah, that caught my attention, too. These holding companies and conglomerates don’t often grow anywhere near that fast.

“They own very profitable operations in 15 states, including: Arizona, California, New York, Nevada, Oregon, Maryland, Indiana, and Washington.”

So … not a whole heck of a lot to go on, in my opinion. But let’s try.

Hmmm … an extra spin cycle for the Thinkomatic Cognitationizer, and we discover that this one is …

Covanta Holding Corporation (CVA).

Covanta focuses much of its work on what is the ultimate renewable energy source: Trash. They run waste-to-electricity plants around the Unites States that essentially burn trash to create steam and electricity (it’s a little more complicated than that, and they have lots of different technologies for scrubbing their emissions and other pollution reduction plans that they seem to be continually experimenting with).

Unlike the other holding companies we’ve gone through here, this one is quite non-diversified. It is essentially a handler of municipal waste and a generator of electricity, and that’s pretty much it. They are trying to expand internationally, particularly in the UK and in China, but I have no idea how successful they will be or have been in this area. To be fair, they also own an insurance company (are holding companies all required to have insurance subsidiaries? It sometimes seems that way), but that’s clearly not the focus of the firm today or in the future.

And, though this is a renewable energy source, which is great, that doesn’t necessarily mean it’s a clean one. Most of this stuff gets burned to create steam to turn turbines and generate electricity, not unlike a coal or natural gas generation plant, so there are some emissions to be dealt with … and potentially some scary emissions, depending on what kind of trash we’re talking about. There is certainly, at least from time to time, plenty of citizen and resident opposition to having a trash-burning plant anywhere near their homes, or even contracting with these plants in other areas.

So the point is, “renewable” is different from “clean” and, depending on who you talk to, not necessarily “green,” though certainly I see that they are working hard on emissions controls, and there is plenty of reason to look into renewable energy regardless of whether or not it’s perfectly clean. This technique does have the advantage of also helping to lessen reliance on landfills and on long-haul trash shipping (remember that garbage barge that was floating up and down the East Coast for a few months several years ago because no one would take it? We’re going to see more and more of that, I expect, as landfills get, well, full.)

In the end, I guess, people have been burning their trash ever since there’ve been people, so there’ s a certain logic to industrializing the process.

Covanta had a significant collapse in share price as 2002 turned to 2003 — on the first day of trading in 2003 the shares were at $1.45. They then bottomed out, it appears, on Feb. 12, 2003 at 74 cents. Today it’s at $25.66. $25.59 would have been a 1765% gain from that January price, if my calculator is working right, so that’s a pretty perfect match. The 15 states clue also matches, though I confess that when Is aw the exact match on the numbers above I didn’t actually check all the state names to confirm. They do have a lot of facilities in California, though only one is technically an “energy from waste” facility — the others use biogas or wood for power generation, and no, I don’t really know what that means.

More recently, the shares have more or less treaded water — this is a growth story, if you’re interested, certainly not a value play like many other waste handlers or electricity generators. You’re not getting a dividend here, and you’re paying 60 times current earnings. The forward PE, if the analysts are on their game, is 28.

To me, that seems fairly steep — I haven’t looked in depth at the company to see if they have hidden assets or undervalued assets, like many holding companies do, or growth potential past 2008 that might change my perception, but right now they look kind of expensive to me. The forward PE is 28, but analysts are projecting only a bit better than 10% earnings growth in the next year. So that’s pretty expensive on its face, with a PEG ratio of well over 2. Today’s data isn’t that much more appealing — the current quarter’s numbers show an actual decline in sales and a very small growth in earnings of about 7% year over year.

Just to be clear, it’s certainly possible that this company’s growth is going to be better than analysts expect, or that there are assets on the books that aren’t properly appreciated (I hope so — the price/book ratio is well over 4, fairly high for either a utility or a holding company), or that there’s some other reason why this is a good buy at this price. I just don’t see it.

If you’re a Covanta fan and want to share with us why it’s a great buy here, please feel free … or, if you want to pile on with concerns and negative thoughts, by all means, jump right in. We take all kinds here at the Gumshoe.