MEDIA!!! - ATF never even mentioned!
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Last Updated: Friday 24 August 2001 LOCAL BUSINESS
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As energy crisis wanes, so do two firms' shares
Ballard Power and Westport Innovations feel the effect of investors' cooling enthusiasm
David Hogben Vancouver Sun
As fears of rolling power blackouts crippling California and the Pacific Northwest have dissipated, so has the investor enthusiasm that drove up the share prices of two high-profile B.C. alternative energy companies.
Vancouver-based Ballard Power Systems Inc., developer of a fuel power cells, and Westport Innovations Inc., developer of a high-pressure fuel injection system, have seen their share prices drop dramatically with the perception that an energy crisis is not imminent.
"There has been a drag on any stock that has been related to this nebulous area called alternative power technology," New York-based TD Newcrest analyst Chris Kwan said Thursday.
Ballard Power closed at $31.67 Thursday, down $2.01 on the day and down dramatically from its 52-week high of $179.75.
Westport Innovations closed at $7 Thursday, up 10 cents on the day, but far down from its 52-week high of $19.90.
The rush to capitalize on skyrocketing energy prices prompted a number of companies to push power projects into development. At the same time a relatively cool West Coast summer has lowered the immediate demand for power.
Calgary-based Andrew Bradford, of Raymond James and Associates, agreed that stocks of alternative-energy firms have under-performed in a weak market due to the failure of the energy crisis to materialize in its most feared form.
"There was not as much of a capacity shortfall," he explained.
Bradford does not expect any turnaround this quarter.
And Los Angeles-based Wedbush Morgan Securities analyst Gary Holdsworth said the lack of an energy shortfall prompted him to issue a sell recommendation for Ballard last week.
"Just one year ago, the energy technology stocks captivated investors with meteoric rises, which were clearly unsustainable. One year hence, we believe the sentiment pendulum has swung 100 per cent in the opposite direction in equally unsustainable fashion. Such is the nature of high-risk technology investing," Holdsworth said in a research paper issued with his sell Ballard recommendation.
Holdsworth said in an interview Thursday, however, that Ballard remains a leading developer of fuel-cell technology.
"We think they have the best management team in the fuel cell developers; we just believe it's overvalued," Holdsworth said.
But as much as the market is adjusting to the out-of-whack expectations of an energy crisis of a year ago, Kwan said current expectations of power supplies are also out of proportion.
"A lot of the new power plant projects they are talking of building will not end up getting built, because of [utilities] commissions" or other factors, Kwan said.
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