Saturday, 25. March 2017  
15.12.2016 19:54
Author: Alex Waber

STOCK SCREEN: Wind Of Change In The Renewable Energy Sector – Valuation Upside Check

 

According to the U.S Department of Energy's Wind Technologies Market Report, wind has been a significant source of new electric generation capacity additions in the country and there was a surge in annual wind capacity additions in the last year. But contrary to most Clinton supporters President elect Donald Trump seems to have strong feelings against wind energy. In a NYT interview he described wind energy as "a very deceiving thing" and that windmills "kill birds" and without subsidy, "for the most part, they don't work."

 

Wind energy supporters claim that wind energy is one of the cheapest forms of new electricity generation, but the cost of wind-generated electricity varies hugely depending on the inclusion of subsidies from taxpayers and depending on the inclusion of costs associated with integrating increasing amounts of wind energy into the electricity grid system.

 

Anecdotally, over the past 35 years, wind energy – which supplied just 4.4% of US electricity in 2014 – has received US$30 billion in federal subsidies and grants - subsidies, that might have shielded people from the uncomfortable truth of just how much wind power actually costs, and that might have transferred money from average taxpayers to wealthy wind farm owners, many of which are units of foreign companies.

 

In this context, we screen the wind energy sector and check the stocks for their Margin-Of-Safety according to our AVM’s Intrinsic Stock Value estimates.

 

Here is our list of stocks in alphabetical order. Compared to historic multiples the stocks in the list look rather cheap, but based on profits not, if business doesn't accelerate. Company names in the table below are linked to the ANALYZER, our single stock analysis tool. Intrinsic Value Model assumptions can be adapted to analyse different growth scenarios with our MODELER forecasting tool:

 

CLICK COMPANY NAME FOR DETAILED STOCK VALUE ANALYSIS

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

GRAHAM UPSIDE [%]

GREENBLATT UPSIDE [%]

PRICE / EARNINGS

PRICE / BOOK

 INFIGEN ENERGY

0.86

671

52.2

-100.0

-100.0

29.9

2.1

 NORDEX SE

18.96

1838

-7.9

-55.1

-74.5

11.9

2.1

 PATTERN ENERGY GROUP INC

19.86

1737

37.2

-100.0

-100.0

-66.5

1.2

 TERNA ENERGY SA

2.65

290

73.1

-22.3

-24.4

12.5

0.8

 VESTAS WIND SYSTEMS A/S

432.10

12873

-6.5

-46.0

-53.2

14.4

3.9