Yield Co Pricing Less Irrational, But Plenty Of Opportunity Left
Tom Konrad CFA Yieldcos are companies which own clean energy assets and use the cash flows from them to deliver a high level of current dividend yield and (in some cases) the promise of significant dividend growth. Investors like them because yield is scarce in the current low interest rate environment. While investors like the relatively high yield offered by yield cos, they are only starting to discriminate between yield cos on the basis of current and future dividends. Four months ago, I published the following chart and noted that the yield cos...
Western Wind: A Clean Energy Rodney Dangerfield?
Tom Konrad CFA Renewable energy power producer Western Wind Energy Corp (WNDEF.PK, WND.V) feels it gets no respect. In particular, they have long felt that the investing public does not recognize the value of the company's existing and nearly completed wind farms. Western Wind's Kingman I Wind & Solar park. Photo courtesy of the company. Independent Valuation Almost every company will tell you that their shares are undervalued, but what's a bit more unusual in this case is that their assets (Wind farms with a little solar thrown in) are...
My Yieldco Raised Its Dividend With This Weird Trick
Tom Konrad CFA Clean energy yieldcos buck the general trend by paying out a large proportion of cash flow to investors, and rapidly increasing their dividends at the same time. The key to this trick has been their rapidly appreciating stock prices. High yield companies generally grow slowly, while high growth companies have low dividend yields. Normal companies grow by investing some profits in new business opportunities. Early stage growth companies typically retain all their earnings to invest in new business. More mature companies have fewer opportunities, and so share a larger proportion of...
It’s Easy Being Green. Fossil Fuel Free Is Harder
Tom Konrad CFA Disclosure: Long BEP, MCQPF. PENGF, AQUNF Last week, I was surprised to discover that Brookfield Renewable Energy Partners (NYSE:BEP, TSX:BEP-UN) is not entirely renewable. I’ve owned shares of Brookfield for many years, but as a relatively safe income stock, I’ve parked it in the back of my portfolio to gather dust and dividends. I apply my limited time for in-depth analysis to riskier stocks where a quarter’s earnings are likely to make a much bigger difference in the stock price. I may have noticed the “Other” category in addition to BEP’s wind and hydroelectric generation...
The Ontario Green Energy Act: What Can Alt Energy Legislations Do For Investors
Dedicated legislations have been at the core of some of the most impressive regional growth stories in alternative energy, most notably in Germany with the Renewable Energy Sources Act or in California with the various legislative solar initiatives. On Monday, the Canadian province of Ontario became the latest jurisdiction to join the fray as lawmakers introduced the Green Energy and Green Economy Act. Why should investors care? Because such legislations have been at the core of some of the most impressive regional growth stories in alternative energy. As a bit of a backgrounder on Ontario, there...
Northland Power’s Solar-Backed Bond
New Canadian Climate bond: Northland Power releases a pretty big ABS - CA$232m (US$206m) - backed by solar projects with proceeds for renewables. 18-year tenor, 4.397% coupon, BBB. Securitisation key future area for green bonds.
The Safest Alternative Energy Yieldco
By Jeff Siegel If you're a regular reader of these pages, you know I'm bullish on alternative energy yieldcos. In fact, I've covered Pattern Energy Group (NASDAQ:PEGI) and NRG Yield (NYSE:NYLD) at length. The way I see it, yieldcos are the next big alternative energy investments for retail investors. They enable regular investors to buy into multiple alternative energy assets that produce steady cash flow. For those not particularly keen on risk, but still want exposure to the burgeoning alternative energy space, this is a great way to do it. The bottom line is that...
5 Clean Energy Yieldcos Flying Under The Radar
by Tom Konrad CFA The launch last year of NRG Energy's YieldCo, NRG Yield (NYSE:NYLD), and the subsequent near-doubling of its price, set off a feeding frenzy on Wall Street. YieldCos are companies which own clean energy assets and use the reliable cash flows from those assets to pay dividends to investors. Investors like YieldCos because many offer yields well above that available from most other stocks, including the fossil fuel-based master limited partnerships, upon which many YieldCos are modeled. Developers of clean energy projects find YieldCos attractive because the stock market provides capital for clean energy...
Where’s Western Wind Energy’s Tax Grant?
Tom Konrad CFA On March 22, Western Wind Energy (TSX-V:WND, OTC:WNDEF) applied for a $90,556,707 tax-free 1603 grant from the US Treasury on behalf of the completed 120MW Windstar project. The press release stated that the grant is subject to approval by the Treasury and payable within sixty days. The Windstar Wind Farm. Photo credit: Western Wind Energy It’s now more than three months later, and no tax grant. The stock is down 24% since May 22, when the grant was expected, but management remains confident they will get...
The Muscle Car Of Energy Efficiency
Tom Konrad CFA Disclosure: I am long TSX:PRI / PENGF. The poster child of energy efficiency has long been changing a light bulb. First, it was swapping out an incandescent for a compact fluorescent, now the swap is to an LED. Changing a light bulb is a small step that anyone can take, and it’s so cost effective that it can pay for itself in months if the bulb is used frequently. This is a good example of household energy efficiency measures: a small action requiring a limited investment that anyone can take that pays back quickly....
Dividends and Value Among Renewable Energy Power Producers
Tom Konrad CFA Almost every stock market sector fell significantly in late July and August this year, and such market declines send me searching for value stocks paying good dividends which I can hold for the long term. In mid-July, I found some decent values by sifting through the trash, but I was less enthused by the value proposition of conglomerates involved in the clean energy space. Today I'll take a look at a group of...
CBD Energy and SFC Smart Fuel Cell Look Promising
From Small Fries to Big Shots? (Pt. 2 of 2) Bill Paul Here now are two more small alternative energy companies, both of which look to be just starting to hit their stride. How far they'll go only time will tell, but each seems to warrant a closer look. Take note: like the vast number of other pure-play alternative energy firms with intriguing growth prospects, neither of these is U.S.-based. Rule of thumb: whether you're a big institutional or small individual investor, to succeed in alternative energy, you must scour every corner of the earth. First up: CBD Energy,...
Brookfield Renewable Energy Likely To Vote Against Western Wind Management in Proxy Battle
Tom Konrad CFA When it emerged that Brookfield Renewable Energy Partners (“Brookfield”, TSX:BRP.UN, OTC: BRPFF) had acquired approximately one sixth of Western Wind Energy’s (TSXV:WND, OTC:WNDEF) stock last Thursday from Western Wind’s largest institutional shareholder, Goodman & Company, investors cheered. The transaction was seen as a signal that Brookfield intends to bid at least C$2.25 for Western Wind in its upcoming sale, and so the company’s stock has been trading for slightly more than C$2.25 since the announcement. Despite this, the Brookfield/Goodman transaction may not prove to be a good deal for Western Wind’s other shareholders. Goodman had not...
Abengoa Seeks Insolvency Protection
Jim Lane In New York, NASDAQ shares in Abengoa SA (ABGB) plunged 49% in Wednesday trading after the embattled renewable energy developer said it would seek bankruptcy protection as it seeks to reorganize nearly $9.4 billion in debt. The protective filing was announced after an expected infusion of nearly $300 million from Spanish steelmaker Gonvarri did not materialize. The company’s debt had been previously downgraded to a B3 rating by Moody’s, six rungs on the ladder beneath investment grade. Last week, Moody’s described the company’s cash reserves as “insufficient” and expressed that asset sales and a round of...
Western Wind to Sell Company, Avoid Proxy Battle
Tom Konrad CFA Western Wind and the Toronto Hedge Funds Last October, Western Wind Energy (TSXV:WND, OTC:WNDEF) received an unsolicited takeover bid of $2.50 a share from Algonquin Power (TSX:AQN, OTC:AQUNF) to buy the company. Before the bid, the stock had been trading in the $1.20-$1.25 range, but President and CEO Jeff Ciachurski felt that it did not fully value the company’s projects and assets, including approximately $1 per share of US tax assets which the Canadian company Algonquin would not be able to use. Large shareholders at the time were in favor of the sale, including at least one shareholder...
EBODF Owns Over $22 Per Share Of Solar Developer Goldpoly,Trades Under $7
by Shawn Kravetz In ten years of solar investing, we have never encountered an opportunity as obscure and potentially lucrative as Renewable Energy Trade Board Corporation (OTCPK:EBODF). Disclosure: I am long EBODF. Before walking through the long thesis, we must caution potential investors that EBODF "went dark" with the SEC in March 2013. However, we have conducted rigorous due diligence on the ground in Asia and through the Hong Kong Stock Exchange filings of Goldpoly New Energy Holdings (0686.HK) - EBODF's sister company sharing the same parent/leading shareholder - China Merchants New Energy Group (part of massive Chinese...
