Here's an email I received this week that I thought was worth sharing. . .
Jeff,
What is your prognosis for Western Wind Energy? I expected Western Wind Energy to take off, but it is losing ground. Does that make sense?
Kent G.
No, it does not make sense. In fact, last week, alternative energy analyst Tom Konrad noted that the stock was trading well below book value plus the value of the 1603 cash grant expected from the federal government in a couple of weeks ($2 per share total). Konrad told investors not to wait until there's real news on this one, which will most likely be positive, like the receipt of the $90 million cash grant, worth as much as the company's stock price on a per-share basis.
I agree with Tom on this one, 100%. The downfall right now, in my opinion, is that so many folks are terrified by the potential loss of the wind energy production tax credit. Although the absence of this tax credit will result on a near-term slowdown in wind energy development in the U.S., it won't have a heavy impact on Western Wind. The company's biggest project that's currently under development is already funded. Not to mention, it's got a smaller operation that's already generating revenue.
This is not some wind power start up. Unfortunately, few investors realize this, see the word “wind” in the company's name, and get spooked. This is why it's so important to know which wind power companies are producing and have the cash to build, and the wind power companies that live and die by the production tax credit. Western Wind is the former, and over time, will show that today's current share price is simply unjustified. Western Wind is good deal at current levels.
Jeff Siegel