RE:RE:Excuse # 127 this time for Q2Renewables are a long-play. Even the small-scale solar system takes, what, 15 years to actually generate a real RoI? I know many farmers who got in on fixed pricing for solar power generation (in ON) not because they saw immediate profit, but because they saw long-term revenue potential.There was no expectation of an immediate return. They did it because they could leverage the capital they had wrapped up in their existing operations and make the outlay necessary to get high quality systems in the ground, knowing that in 10-15 years, when the capital costs had been paid down, the profit margin would be pretty sweet. Save for general maintenance, it just sits there generating power, hour-after-hour, day-after-day.
A terrible analogy, I know. The point is simply that, when you invest in setting up or aquiring all these different operations, there is considerable investment and/or debt required. Commercial operations are often years behind the initial investment, and true profitability is years out from that.
We can complain about the board, complain about the quarterly losses, etc., and I would agree it can't go on forever. But if you step back and look at the bigger picture - a diversified renewables company which appears focused on adding more generation wherever possible - you can see the makings of a potentially major player. Are they there now? No. Will they ever get there? Not entirely clear. Are they a rinky-doink operation that has bitten off more than it can chew? I would say no, they are not that. They have built a solid foundation and should be able to ride the renewable energy wave that is ever growing.
Call me crazy, but I anticipate the investment I began two years ago will look better in 5 years than it does right now. And that is acknowledging that, based even on a price of $5.50, I have already seen an increase of roughly 20%, with a dividend to boot.