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Western Wind Energy Corp V.WND

Utilities Utilities - Independent Power Producers


TSXV:WND - Post by User

Western Wind Energy Corp > So it seems ..........
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Comment by agrossfarmon Sep 26, 2012 11:43am
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Post# 20415993

RE: RE: RE: RE: RE: RE: RE: So it seems ..........

RE: RE: RE: RE: RE: RE: RE: So it seems ..........

20x earnings?

This is not some punter looking to buy 100 shares of stock, so I doubt they are looking at earnings...especially given the tax breaks.

When a company looks to acquire another one, they look at free cash flow (after maintenance capex) and they deduct GS&A expenses that would be redundant (the head office for example and bonus payments to the CEO and Directors) and unnecessary.

The bottom line is how much cash is thrown off by the business now and in the future. Of course there are also things specific to the type of business, like the length of power sale contracts, escalator clauses, projected maintenance costs, etc.  

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