Today we’re looking at a nice big burst of hot air (and yes, that title is, it seems to me, a load of hooey) from the folks at Green Chip Stocks — all in the interest of getting you a hot idea in wind energy, and, of course, driving your windlust to the point that you’ll subscribe to their newsletter.
Here’s how they pitch it?
“With oil at $65 a barrel, let me introduce you to. . .
“The ONLY Publicly-Traded Wind Developer That Actually Makes You Money When The Price Of Oil Goes Up!
“Over the past 5 months, the price of oil has risen more than 50 percent.
“And during this time, one wind energy stock has delivered gains in excess of 145%….
“Not a chance!
“In fact, that chart represents nothing more than a similar pattern we see every single time oil prices head north.
“Imagine being on the receiving end of that one when oil hit $140 a barrel!
“From May, 2007 to June, 2008 (around the same time oil prices were heading towards $140) this little wind energy stock soared from a low of $0.93 to $4.35.
“That’s a 367% gain in just 13 months.
“I don’t care how good you are – gains like that don’t happen every day.
“But this one’s definitely about to happen again.”
You don’t see words like “definitely” all that often in teasers — then again, you do usually get statements that completely strain credulity, like “the ONLY Publicly-Traded Wind Developer That Actually Makes You Money When The Price Of Oil Goes Up!”
Since of course, alternative energy stocks almost all spike when energy prices climb — and you can tell from just a quick look at a chart of USO (the exchange traded fund that many traders use for exposure to oil futures) and either of the wind power industry ETFs (PWND or FAN) that, yes, when oil goes down, wind stocks go down … and when oil goes up, wind stocks, on average, go up. So if that’s all you’re looking for, you can easily get exposure to the giants of wind power — utilities, equipment and turbine makers, windfarm owners, etc. — through the ETFs.
But if you’re curious about this little wind stock, which, one might expect, will probably also go up if conventional energy prices rise, and will perhaps be more volatile and offer some home run potential — well, let’s look at the clues and see if we can identify it for you.
It is a company that’s specifically exposed to California, which is a positive for any alternative energy company (assuming that the CA economy doesn’t sink so far that power demand collapses or they give up or relax their stringent clean energy laws).
Here’s how the teaser describes (exaggerates, perhaps?) the California impact …
“The Wind Energy Advantage In California. . .
“45% Higher Wholesale Pricing
“30 to 40% Higher Energy YieldsAre you getting our free Daily Update
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“500% Higher Retail Energy Prices
“So last year, when oil began to soar from $60 to $140 – this California wind developer (and its investors), made an absolute fortune.”
And they further the argument with CA’s latest clean energy law, which kicks in soon …
“Of course, even beyond rising oil prices, there’s actually something much bigger at play here. . .
“Something that’ll keep this one specific wind energy company generating revenue for decades – regardless of oil prices.
“You see, California has a law on the books that’s about to kick in just 6 months from now. And it’s a law that basically helps guarantee. . .
“20 Years Of Non-Stop Revenue For This One Single Wind Play
Starting January 1, 2010 – 20% of all power generated by California utilities must be generated from renewable sources.”
OK, so that’s the backdrop — they go on to say that there’s a possibility of a national mandate for increased clean energy use by utilities, and that although the “Wind Belt” that will supply most US windpower is along the plains states coming off the Rocky Mountains (from Texas up to the Dakotas) there is currently a profitable wind farm area in California, where this company operates …
“…. it’s primarily the winds in the Tehachapi region of California that are pumping out much of today’s wind-generated power.
“And this is exactly where our little wind developer has already set up shop.
“That particular region is so hot for wind development, on my last trip I actually recognized another analyst touring a neighboring wind farm.
“But here’s the difference between our wind play and every other wind developer in that region. . .
“While financing has almost completely dried up for new wind energy projects – our favorite wind developer has actually been turning offers down!
“In fact, they recently declined an offer of $228 million for the development rights for their latest project (including royalty payments).
“According to management, given the market for renewable energy today – developing their own projects simply provides a greater return.
“And boy are they right!
“My friend, today that project is worth more than a half billion dollars!”
So … that’s enough of a lead-in, how about some specific clues?
The company currently generates 34.5 megawatts of energy, and has no “project debt,” and brought in $5.1 million in re