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...

What to Make of the TXU Deal?

Last weekend, TXU Corporation (NYSE: TXU) made the stunning announcement that it would be acquired by two private equity giants Kohlberg Kravis Roberts (KKR) and Texas Pacific Group (TPG) in a transaction valued at $45 billion. Press release Two things leap out at me from the announced deal. First, the investors are willing to pay a 25% premium over the recent share price, while at the same time committing to a 10% rate reduction for TXU's residential electricity customers in Texas. KKR and TPG are no dummies: it must mean that they truly think...

Valuing the Boralex Power Income Fund Buy-Out

Tom Konrad, CFA Boralex Inc. made an offer to buy out the Boralex Power Income Fund on May 19.  The price is reasonable.  Boralex (BLX.TO, BRLXF.PK) announced on May 2 that it would offer C$5 per share in convertible bonds for all outstanding shares of the Boralex Power Income Fund (BPT-UN.TO, BLXJF.PK) that it did not already own in an acquisition approved by both boards.  As usual with mergers, the Boralex Power Income Fund's ("the Fund's") unit price jumped from C$4.61 to C$4.90 the next day, but then if started to fall back as people had...

Alterra Power: Cash to Invest

Tom Konrad CFA I sometimes think Alterra Power (TSX:AXY, OTC:MGMXF) is unfairly lumped with other small, renewable energy developers. A typical problem for small developers over the last few years has been raising the funds to invest, even when they have compelling prospects.  For instance, Western Wind Energy stock (TSX:WND,OTC:WNDEF) has been beat up recently because a large Federal cash grant is delayed.  Finavera Wind Energy (TSXV:FVR, OTC:FNVRF) has been declining for most of the year as they look for a strategic partner to help fund their permitted wind developments, despite significant progress permitting those projects and...

Capstone Infrastructure: Green Income At A Cardinal Discount

Tom Konrad CFA Capstone Infrastructure Corp.'s Gas Cogeneration facility in Cardinal, Ontario. Capstone Infrastructure Corporation (TSX:CSE, OTC:MCQPF. Disclosure: I own this stock) is an international operator and developer of green infrastructure assets and utilities which is currently selling at a significant discount to most comparable firms.  I recently ran a comparison of six similar Canada-listed firms, and Capstone seemed much cheaper on several measures. The Discount The following chart compares five renewable energy and green infrastructure firms with most of their operations in Canada: Capstone, Algonquin Power and Utilities (TSX:AQN, OTC:AQUNF), Brookfield Renewable Energy Partners (NYSE:BEP),...

Covanta: Waste Yield

by Debra Fiakas CFA Last week Covanta, Holding Corp. (CVA:  NYSE) announced the pricing of a note offering.  The waste disposal and waste-to-energy company raised $400 million in the deal.  The new capital will make it possible for Covanta to repay some older debt when enough to spare for future expansion capital.  Covanta’s business model of using the municipal waste it collects for electricity generation is capital intensive.  What is more management has shown a penchant for acquisitions.  Just two months ago Covanta acquired two waste transfer stations from a competitor. Covanta appears to be making...

Western Wind Expects Full Cash Grant for Windstar

Tom Konrad CFA The Windstar Wind Farm. Photo credit: Western Wind Energy On July 10, shares of Western Wind Energy (TSX:WND, OTC:WNDEF)plummeted because of a $12.2 million shortfall in the 1603 cash grant from the US Treasury for the company’s Windstar wind farm compared to the application.  In order to reassure skittish investors, the company held a conference call on Monday, July 16. On the tenth, I thought that investors should write off the 1603 cash grant shortfall, despite the fact that the company intended to send a delegation...

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...

E.On Launches $34.72B All-Cash Endesa Bid

German utility E.On AG launched a 29.1 billion euro ($34.72 billion) all-cash bid for ENDESA (ELE) on Tuesday, topping a previous offer from Gas Natural by more than 30 percent and threatening to disrupt carefully laid plans for Spanish power-market consolidation. Endesa said in a statement that the E.On offer was "clearly" the better of the two, but added that it still did not adequately reflect Endesa's true value. Shares of Endesa were up 15% in yesterday's trading.

FPL Group Beats Estimates By $0.06 and Profits Rise

FPL Group Inc (FPL) reported 2005 fourth quarter net income on a GAAP basis of $206 million, or $0.53 per share, compared with $173 million, or $0.47 per share, in the fourth quarter of 2004. FPL Group's net income for the fourth quarter 2005 included a net unrealized after-tax gain of $27 million associated with the mark-to-market effect of non-qualifying hedges. The results of last year's fourth quarter included a net unrealized after-tax loss of $2 million associated with the mark-to-market effect of non-qualifying hedges. Excluding the mark-to-market effect of non-qualifying hedges, FPL Group's earnings would have been...

Calpine to sell about a fifth of power plants

Calpine Corp. (CPNLQ.PK) said it plans to sell about one-fifth of its power plants in a bid to emerge as a leaner company focused on its profitable geothermal and gas-fired operations. The company also said it plans to close three offices and cut about 775 jobs. Without identifying the plants, Calpine said the sale of about 20 facilities would allow it to focus on core assets and key markets. The company's largest power markets are California and Texas. The plans drafted by CEO Robert May should allow the company to save over $150 million a year and...
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