No households in Goudoubo camp had access to electricity and 90 percent cooked with firewood using inefficient cookstoves. Demand for wood is speeding up the ongoing process of desertification in an area where climate change is already bitin…
by Debra Fiakas CFA
In the second week of November 2015, GAMESA Corporation (GTQ1:
Berlin, GAM: Madrid, or GCTAF:
OTC), Spain’s wind turbine manufacturer, reported double the net
profit in the nine months ending September 2015, on revenue that was
30% higher than the same period last year. During the period
GAMESA has received orders from customers in twenty-five different
countries for wind turbines with generating capacity of 2,841
megawatts. Backlog at the end of September 2015 was
3,034 megawatts, representing a 43% increases over backlog a year
ago. At a time when some companies are struggling amidst weak
demand, GAMESA’s success stands out.
Part of GAMESA’s good fortune appears to be the result of an
expanded product line. The company introduced a new 2.5
megawatt turbine for low winds earlier in the year. The first
turbine in a 3.3 megawatt family is to be launched at the European Wind Energy
Association event in Paris in late November. The broader
selection of size seems to have given GAMESA better reception in
markets like Canada, South Africa and northern Europe, where onshore
wind energy projects are underway.
GAMESA has a solid presence in the U.S. market with an installed
base of 4,150 megawatts across the continent. Sales the U.S.
accounted for 15% of total sales in the first half of the
year. The company’s most recent sale in the U.S. was for a
wind project in New York to will rely on thirty-seven of GAMESA’s
2.1 megawatt turbines to generate 78 megawatts of total power.
GAMESA also has a joint development agreement with renewable energy
giant SunEdison (SUNE:
NYSE) to jointly develop wind projects totaling at least one
gigawatt of power.
Strong sales and higher profit margins have generated strong cash
flows. GAMESA has been able to pay down debt. During the
year the company has used Euros 238 in cash to reduce net debt to
Euros 70 by the end of September 2015. Management’s focus on
deleveraging the balance sheet has not left shareholders in the
The company recently reinstated a dividend and pledged to pay out
25% of profits. The company paid a Euro 0.08 annual
dividend to shareholders in September. The current forward
dividend yield of 0.6% may not be impressive, but it is encouraging
that the company has been able to reinstate a dividend.
Taking a position in GAMESA by U.S. investors requires stepping out
to the Madrid or one of the German exchanges. Most U.S.
brokers have layered on sufficient platform services to facilitate
trading securities in listed on exchanges in outside the U.S.
A position in GAMESA gives shareholders a stake in a leading wind
turbine manufacturer with sufficient strength to serve the world
market. The stock has moved higher in the year and is not the
beaten down bargain it was a few months back. However, the
stock is still trading at 25 times trailing and 19 times forward
earnings, representing potential upside of 38% even without
Debra Fiakas is the Managing Director of Crystal Equity
Research, an alternative
research resource on small capitalization companies in selected
Neither the author of the Small Cap
Strategist web log,
Crystal Equity Research nor its affiliates have a beneficial
interest in the companies mentioned herein.
Our homes and our offices are getting smarter by the day as the Internet of Things — the internet of everything — becomes increasingly ubiquitous. Soon we’ll be able to control even the heat and light that streams through our windows with …
One starkly unique thing I realized about Sanga and his vision is his outlook on success. Eco-Fuel Africa is very much a company, but ask Sanga about monetary profits and you get a cool and calm assurance that the company makes money, but su…
Hillary Clinton has yet to address the issue of fracking during her campaign. She recently vocalized her opposition to Keystone XL and Arctic drilling, but only when it was deemed politically favorable to say so.
Read more: Hill…
We need to add a new dimension to the Golden Rule: you shall do unto the next generation what you wished the previous generation had done to you. We have no right to hand over a planet that is in a more miserable condition than the planet we…
Date: 11/9/2015On November 9, the Interior Department’s Bureau of Ocean Energy Management held a competitive lease sale for 344,000 acres offshore New Jersey for potential wind energy development. The provisional winners are RES America Developments In…