Logical Thought
Hedge fund manager, long/short equity, growth at reasonable price, value

At The Current Stock Price, Broadwind's Wind Businesses Are Free...

Last month I wrote an article here on Seeking Alpha explaining why - based on my estimate of 2014 EBITDA - I believe Broadwind Energy (NASDAQ:BWEN) should be worth $8-$12/share over the next year or so. Now I'd like to approach the company's valuation from a different angle.

Broadwind's gearing business (Brad Foote Gear Works, Inc.) is doing approximately $50 million/year in revenue. In 2011 Philadelphia Gear was sold to Timken for 2.4x revenue and in 2012 Milwaukee Gear was sold to Regal Beloit for approximately 1.3x revenue. (These were both publicly announced transactions and you can Google them and see the details for yourself.)

Using the lesser figure of 1.3x revenue would value Broadwind's gearing division at...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
  • Access Top Ideas, chosen by Seeking Alpha’s editors
  • Filter long and short ideas by market cap and sector
  • Get Coverage of over 5,000 stocks, many of which have little or no coverage elsewhere
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO." Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else." Patrick Rice, Mainstay Capital Management
100% Satisfaction Guaranteed
Money back guarantee. Seeking Alpha PRO members receive a no-questions-asked refund for membership on months paid and not used. Details