The chart and discussion below show individual stock performance. I will focus on the alternative picks, since I neglected them in the last update.
Finavera Wind Energy (TSX-V:FVR, OTC:FNVRF)
Finavera reported their third quarter results. Highlights were the on-time submission of the Miekle wind project for up to 187 MW. This means that Pattern and Finavera are still hoping that permitting and wind regime will allow the most lucrative "Super-Miekle" option, discussed here. On the downside the financial close of the Cloosh wind farm was delayed "caused by changes to the project financing logistics between the majority partners, and more specifically a shift from balance sheet financing to non-recourse project financing." An additional delay was caused by an Irish lawsuit filed by one of the project's lenders. From my reading of the most recent ruling and discussions with Finavera's CEO, the substance of this lawsuit concerns who gets paid when, not the amounts owed. Hence the delay's effect on Finavera's final valuation should be limited to interest.
Alterra Power (TSX:AXY, OTC:MGMXF)
Diversified renewable energy developer Alterra Power Corp announced the sale of its 10 percent stake in a 50-MW solar project acquired earlier this year. Alterra CEO John Carson justified the sale by saying "This transaction provides immediate positive returns to our shareholders," but I doubt the profits were significant given the quick turnaround. Rather, I think his comment that "our primary development focus is placing the Jimmie Creek Hydro and Shannon Wind projects into construction" describes the real reason. Small solar projects were likely proving a distraction and a drain on tight liquidity.
I think Alterra's recent joint venture in Italy, where its Italian partner will be able to earn a controlling 55 percent stake in its Italian geothermal and solar projects, and Alterra's termination of its solar joint venture with Greenbriar in Puerto Rico both support my theory that management decided it needed to focus on these two large development projects.
Six Alternative Clean Energy Stocks
New Flyer Industries (TSX:NFI, OTC:NFYEF)
Leading mass transit bus manufacturer New Flyer has been drifting lower after a $0.50 lowering of the company's price target from C$12.50 to C$12 by CIBC. I suspect analysts there were disappointed that the company did not announce an increase of their production rate in the third quarter despite strong backlog growth. I think this recent decline represents an improved buying opportunity given New Flyer's recent acquisitions in the North American aftermarket parts business. I believe these acquisitions will provide a steady stream of income and widening profit margins going forward.
LSB Industries (NYSE:LXU)
LSB missed analysts' third quarter earnings expectations on what I believe were delays in insurance payments. I thought the sell-off unjustified and added to my position as the stock dipped below $30.
Maxwell Technologies (NASD:MXWL)
Ultracapacitor maker Maxwell Technologies has been drifting slowly lower since there has been no renewal of Chinese hybrid bus subsidies. I'm increasingly convinced that the plug-in-hybrid bus subsidies announced in September will be all there is, and Maxwell is unlikely to match its former hybrid bus revenues in the plug-in hybrid market.
US Geothermal (NYSE:HTM, TSX:GTH)
Geothermal power developer US Geothermal sold off after filing an S-3 shelf registration to potentially sell additional shares on November 29th. I think shareholders may over-reacted in this case because November 29th happened to be the day after Thanksgiving, and so it appeared that the company was trying to sneak the filing in when investors were out shopping. While such filings can often be a signal of impending shareholder dilution, in this case the filing simply replaced an existing filing which would have expired on December 1st. The seemingly clandestine Black Friday timing is fully explained by the fact that November 29th was the last business day in November.
Ram Power Group (TSX:RPG, OTC RAMPF)
Geothermal developer Ram Power filed a Rights Offering to raise funds from existing shareholders, which I discussed in detail here. One additional detail concerns the "additional subscription" privilege included in the rights. This allows rights-holders to offer buy shares allocated to un-exercised rights. The press release stated that such shares would be allocated on a "pro-rata" basis, but did not specify if they were pro-rata by the number of rights held, by the number of shares held, or the number of shares the rights holder asked for. I called Ram's investor relations contact, who could not answer the question but referred me to the transfer agent. It turns out that additional shares will be allocated pro-rata based on the number of shares requested. Hence, even a holder of a single right would be able to participate in the offering in a meaningful way by requesting a large number of shares under the additional subscription option.
Disclosure: Long WFI, LIME, PFB, HASI, ACCEL, FVR, AXY, WM, NFI, LXU, AMRC, PW, HTM, RPG. Short: KNDI.
DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results. This article contains the current opinions of the author and such opinions are subject to change without notice. This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
This article was originally published on AltEnergy Stocks and was republished with permission.
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