Posted by Windy Admin on October 23rd, 2008
It has been a while since i have posted but i figured I’d take a quick marker of where we are with Wind Energy stocks. So how do i put this? ALL FORMS OF ENERGY HAVE IMPLODED! Oil, Solar, Wind and anything else related to energy has gone down anywhere from 15-80%. Oil has tumbed by more than 50% making other more expensive forms of energy become less attractive. One of our favorite stocks, A-Power (APWR) is now trading around $5 per share which gives it a FORWARD PE of below 3! This is absolutely unheard of in normal markets.
We will continue to monitor the situation as there will be loads of bargains once the bloodshed is over.
Posted by Windy Admin on September 3rd, 2008
Almost half a billion dollars in government tax credits will expire at the end of this year unless Congress renews them. Without that aid, solar and wind power companies may curtail planned expansions, jobs and R&D. Greg Wetstone of the American Wind Energy Association predicts losses of more than 75,000 jobs and potentially over $11 billion in investment if Congress allows its production tax credit to expire. A number of wind power companies such as A-Power Energy Generation Systems, Ltd. , Vestas and Gamesa could be affected. In addition, since the price of oil has plummted 35% in the last 2 months, the price of energy as a commodity is coming down and will put pricing pressure on alternative energy sources making them less attractive to deploy. For wind energy to continue to grow and proliferate and become more efficient, we unfortunately need oil to continue to stay above $100 for the forseeable future, otherwise there will be a gravitation back to non-renewable energy and the recent progress will stall.
Posted by Windy Admin on July 24th, 2008
Launched in July, there is a welcome of a “Pure Play” Wind Energy ETF. The ETF, named PowerShares Global Wind Energy Portfolio (Nasdaq: PWND), is based on the NASDAQ OMX Clean Edge Global Wind Energy Index. This index is comprised of companies related to the use, development, manufacturing or distribution of wind energy. Don’t expect a bunch of small cap or bulletin board stocks to comprise this ETF, Its major holdings include the major players in wind power. As indicated by the table below, the vast majority of its holdings are in major global wind companies such as Vestas and Gamesa. Many of these currently trade on foreign exchanges so this type of ETF definitely improves accessibility for the average American investor. As expected, many of the smaller volatile plays such as NCEN, WWEI and APWR are excluded for now.
| Name |
% of Portfolio |
| Gamesa Corporacion Tecnologica S.A. |
10.1977% |
| Vestas Wind Systems A/S |
10.0832% |
| Iberdrola Renovables S.A. |
9.8686% |
| Nordex AG |
6.7868% |
| Hansen Transmissions International N.V. |
5.4719% |
| EDF Energies Nouvelles S.A. |
4.6179% |
| China HSTE Group |
4.5980% |
| American Superconductor Corp. |
4.4387% |
| Theolia S.A. |
4.2222% |
| Greentech Energy Systems A/S |
4.1758% |
| Zoltek Cos. |
3.6771% |
| Clipper Windpower PLC |
3.2650% |
| Canadian Hydro Developers Inc. |
3.1794% |
| REpower Systems AG |
2.4656% |
| Gurit Holding AG |
2.2336% |
| Fersa Energias Renovables S.A. |
2.1138% |
| Composite Technology Corp. |
1.7850% |
| General Electric Co. |
1.6663% |
| C. Rokas S.A. |
1.6545% |
| Siemens AG |
1.6112% |
| E.ON AG |
1.5095% |
| ABB Ltd. (ADS) |
1.4696% |
| Renewable Energy Generation Ltd. |
1.4363% |
| Japan Wind Development Co. Ltd. |
1.3531% |
| FPL Group Inc. |
1.1150% |
| Plambeck Neue Energien AG |
1.1068% |
| China WindPower Group Ltd. |
1.0667% |
| Centrica PLC |
1.0055% |
| Mitsubishi Heavy Industries Ltd. |
0.6466% |
| AES Corp. |
0.5007% |
| Xcel Energy Inc. |
0.4052% |
| Acciona S.A. |
0.2730% |
The ETF justed launched in July, so there is not much history on performance of the ETF. The underlying index in which it is tracking however (NASDAQ OMX Clean Edge® Global Wind Energy Index), has been around longer and we can see that we are within 5% of the 52 week low of $22.46 which appears to be a solid buying opportunity. Unlike some other wind plays, we don’t expect this ETF to have the potential to be a 2-3 bagger, but could exhibit solid and steady growth over the next few years and wind energy becomes more prominent on the average investor’s horizon.
Posted by Windy Admin on July 15th, 2008
A-Power Energy Generation Systems Ltd said it has signed a deal, to build a wind turbine production facility, with the Chinese city government of Bayan Nur. 2,100 MW of wind power generation in the Bayan Nur region has already been approved by the government and A-Power will be poised to capitalize on this with a turbine production capacity of over 1,800MW by the end of 2009.
The 290,000 square foot plant is set to cost about $20 million and is expected to be completed in July 2009 less than a year away. This will allow A-Power to scale and manufacture wind turbines of 2.5MW and 750kW capacity. Furthermore, the company said that under the deal, the city government has agreed to tax breaks and to coordinate sales with wind farms in and around Bayan Nur region.
Currently analysts Roth Capital and Jessup & Lamont are covering the stock with Buy rating. Further more, the largest institutional holder (over 4.5 million shares) of APWR is hedge fund JLF Asset Management which happens to be a 25 minute drive to APWR US headquarters in San Diego, CA. This is quite important in my mind as I suspect JLF is having quite frequent dialog with APWR on the state of the business when company execs are stateside. I would be looking closely at movement on JLF Asset Management’s holdings as a forward indicator of the stock.
Looking at the fundamentals, APWR has over $100 million in cash and cash equivalents, over $700 in backlog and no debt. Furthermore, the company is on track to earn at least $1.5 per share and 500 million in revenue in FY 2009 giving it a forward PE of less than 20 at its current price of approx $27 per share. This looks like a stock you buy and forget about for a year and you could be well rewarded.
Below is a 3 month chart of APWR
Here is a link to a mention of APWR back in Feb on CNBC
