Alterra Power MGMXD

RE:RE:RE:RE:RE:4th Quarter Resuls

[materialsgirl]

RJ;

Firstly I concur that many things seem positive about AXY.  There are a lot of specific things to like. But where is the money?   Cash flow is a more important metric than net profits in the short term for infrastructure type businesses as was pointed out.  I agree.  But long term the only thing that matters is profits after all expenses and corporate tax

The last place anyone should ever search for information is a press release or any comments from management (in any company)   They are all the same in that the information revealed is selective and the documents are pure spin doctoring.  Many companies are so good at spin doctoring that management begin to believe their own BS.  This latter comment is meant to be general and not to apply to Alterra specifically.  They often begin with "we are pleased" even if the final number is a loss of $1b.  The releases are written by Public Relations and sprinkle the text  with positive snippets and words like "impressive" and "strong growth". They need to know little about the business as their trade is "word smithing" stories.   They spend 90% to 95% of the time revealing little facts that seem good and skip over the massive losses or writedowns.

The purposes of press releases is;

1 compliance with the law in issuing 4 reprts a year.
2 selling the idea to investors to buy its shares
3 management to keep analysts and unhappy shareholders at bay by painting a rosy picture of the future


It is ok to read press releases etc. but this activity should not be a big part of decision making for individual shareholders.  


Having said that I see AXY as a possible big winner by 2020;  a potential double or triple.   But the main reason is that it has performed so badly for so long;  from $1.80 to 30 cents.   It was never really worth $1.80 5 years ago but back then green energy and REE were hot hot hot

Revenue could be up close to $150m in 2017  (I did not do a detailed calc recently so this is just ballpark) and if they control internal expenses well the outcome could be very very very good.

It is expected (by me at least) that AXY will convert into being a basic dividend paying infrastructure play over the next 2 or 3 years.   By 2020 the dividend could be 3¢ to 6¢  (30¢ to 60¢ based on a 10:1 consolodation of shares which is almost certain).  The share price then may mainly be determined by the dividend amount.  The share price will be 20 or 25 times the dividend which would mean a 4% to a 5% dividend on the then share price

I see it as looking great but not based on the spin in the press releases.

Be happy

mat