WND opinionReasons why this stock is not flying off
1. the low (summer) volume is not attracting buyers while a small number of sellers is pushing down prices causing..
2. a weak technical outlook..
3. which is partly to blame because share price was held back in spring in lvls 1.50-1.70..
4. as a result of ITM options/warrants converted around these levels
5. more, the new attracted IR and ex-WND analist is low profile/below radar
6. And last, some retail investor were/are disappointed because the Substantial Issuer Bid (SIB) is being pushed further in time.
All these arguments have a soft or temporary character and the main disadvantage not in favor of the company is CONFIDENCE. A lack of investor confidence is holding back this stock. It only takes a shift in investor sentiment to acknowledge the very bright prospects and the huge undervaluation.
Cause, if we shake the above arguments off for one minute, and look to the fundamentals the picture is much clearer (and very good looking) with WND bringing their Windstar project closer to completion and multiple other wind/solar projects not taking into account in the current stock valuation.
Windstar (120MW) up and running before the end of December deadline
- will start generating revenue ($40mio) & free cash flow ($10 mio)
- eligible to receive $98 mio US gov cash grant
- eligible for equity sale of 100% bonus depreciation
With WND completing Windstar and receiving the US cash grant, paying back bridge loans to Rabo and RMT, the company will have a surplus on its bank account (read: or they did more loans long term vs bridge loans short term or the project is finishing below estimated costs). The market does not acknowledge this.
Only in a later phase, the company may go on with its Substantial Issuer Bid, but I can only hope they will cancel these plans as it will only have positive effects for non-selling shareholders in the very long run. The company has better ways with their cash at hand to create value for its shareholders. Be aware that the money for this SIB, should come from the sale of the 100% Bonus Depreciations and this is not possible the first months. I rather prefer the company using their cash in new projects. Those new projects are at hand, eg.
- Windswept, 30MW
- Snowflake, 200Mw
- Barstow, 100MW
A concrete time-line for WND for the coming weeks/months
(check) sep/aug 2011 Kingman I completion
2011 Q3-Q4 outcome application Mesa II (repowering)
2011 NOV Kingman I receive of 30% ($9mio) US cash grant
2011 Q4 Erecting meteorological towers at Snowflake
2011 Q4 Yabucoa : close financing + stage of final permitting
2011/12/31 upgrade Kingman II => approval ?
2011 DEC Windstar commercial operational
2012 Q1 Windstar receiving of 30% ($98mio) US gov cash grant
2012 Q1/Q2 sale of bonus depreciation Windstar&Kingman ?
2012 Q1 migrate from Venture to Toronto ?
mid-2012 Yabucoa followed by
+ 30% cash grant
+ sale of bonus depreciation
and of course my disclaimer I am long term shareholder WND, did recent buy and planning to add more.