Eight Wind Energy Related Stocks

Do you know when the first recorded use of a windmill was? It was first used in the 1st Century AD. Can you guess what it was used for? It was used to power an organ.

Last year, I wrote an article about the stocks of companies that are involved directly in the windmill, wind power, and wind energy business. Unfortunately, most of them were either foreign companies or pink sheet stocks or both. However, there are many companies involved in the wind energy business on a peripheral basis, such as the manufacturers of the material used in windmill blades. Here are some wind energy related stocks, all of which have market caps over $900 million.

American Superconductor Corporation (AMSC) has an AMSC Power Systems division which markets electrical systems used in wind turbines, electronic power products that regulate wind farm voltage, proprietary wind energy system designs to wind farm manufacturers, and consulting services to the wind farm industry. The company has a market cap of $1.24 billion. This Massachusetts company has recently generated negative earnings of $0.65 per share.

Brookfield Asset Management (BAM) is a Canadian-based asset management holding company which has a division that develops wind power throughout Canada, along with the operation of hydroelectric power facilities, interconnections, and transmission facilities throughout North America. The stock has a market cap of $22.4 billion. It has a P/E of 29, a PEG of 3.34 and pays a yield of 1.50%.

Broadwind Energy, Inc. (BWEN.OB) is a Naperville, Illinois company which manufactures wind energy products including steel fabricated towers, internal tower components, and other large fabricated components. The company has a market cap of $1.8 billion and recently generated negative earnings of $0.07 per share.

Clipper Windpower (CRPWF.PK) is the British manufacturer and marketer of wind turbines, and develops wind power electrical generating projects in North and South America and Europe. The company recently generated negative earnings. Queen Elizabeth II of England has just purchased the world’s largest wind turbine from the company, which is 492 feet high, and will produce 7.5 megawatts a year.

Otter Tail Corp. (OTTR) is an electric utility which also manufacturers and markets wind towers. The company has a P/E of 22, a PEG of 2.68 and pays a yield of 3.20%.

Owens Corning (OC) produces glass fiber reinforced composite materials used in wind energy, transportation, electronics, and the marine industry. According to the company, its WindStrand™ product is longer, lighter, and less costly than other blades. It has a P/E of 43, and a PEG of 4.32.

Trinity Industries Inc. (TRN) is a Dallas, Texas-based company which has an Energy Equipment division which manufactures structural wind towers. The company has a market cap of $3 billion. It has a PE of 10, a PEG of 1.08 and pays a yield of 0.80%.

Zoltek Companies (ZOLT) is a supplier of carbon fiber for windmill blades to major wind energy companies. The company has a market cap of $959 million. It has a P/E of 145, and a PEG of 0.92.

Don't forget to check out the top Green Week Stocks.

Disclosure: The author owns OTTR.

Comments

[Barry Robbins:]

Great article. If you mention Clipper, then you need to include the 3 bigger, by market share, wind turbine producers: Vestas (VWSYF.PK), Gamesa (GCTAF.PK), and Nordex (NRDXF.pk). All three of these companies are great investments for the future. I own all 3. Gamesa and Nordex are 2 of my biggest holdings.

2008 May 25 09:52 AM

[Barry Robbins:]

Another one to mention is Canadian Hydro Developers (KHD.TO) - they own a number of windfarms in Canada.

2008 May 25 09:54 AM

[Ham Radio:]

The advantage of Trinity is some diversification, with exposure to railcar manufacturing. A nice way to also play the rails.

2008 May 25 04:12 PM

[Rdurant:]

Your missing the best value with the highest growth potential. The company is CPTC, on the OTB BB, or CPTC.OB. This company manufactures the DeWind Series Wind Turbine, tower. They have actual sales in the tens of millions of dollars. They are backed by Credit Suisse, and the best part is, ready for this? IF read the the 10Q, they are in talks to sell HUNDREDS of Wind Turbines to a develope in TEXAS and a project in Brazil, that can if exercised, could be worth a BILLION dollars. The company has a market cap at a little over $200M, trades at $1.02. This is the best company in the wind space for real upside gains in the short and long term.

2008 May 26 08:52 AM

[mariposa:]

I have been thinking my next buy will be in the wind power area. I own Trinity, bought for the rail car component. I weathered it through the rough times last year, but now the wind is blowing in its favor.
I had wondered about Vestas and Gamesa. Copying this thread and will study some of these suggestions. Some alarming P/E's here though.

2008 May 26 09:19 AM

[mariposa:]

mariposa is pseudonym for User 198789 above. I am new to Seeking Alpha and so far am impressed.

2008 May 26 09:21 AM

[mariposa:]

Another company of interest is Hexcel, which makes carbon fiber blades.

2008 May 26 09:42 AM

[Barry Robbins:]

Mariposa, I think the PEs for the wind turbine makers is very reasonable: Nordex - 22, Vestas - 25.

This article has some PE numbers at the bottom:

www.guardian.co.uk/bus...

2008 May 26 11:55 AM

[Paul Killinger:]

Rdurant,

Thanks for the tip, friend. The TX developer is probably billionaire Boone Pickens, who is planning to build massive wind farms in conjunction with his CLNE company, which is another potential renewable energy investment.

2008 May 26 12:43 PM

[belmont:]

if interested in the best windpower play, go to vestas wesite. adrs listed on pink sheets, about $49,a share. they have about 23% of the world market. one of belmont's best

2008 May 26 12:46 PM

[buyforeclos...:]

Seems to me that TRN and ZOLT have the most upside based on pegs

2008 May 26 01:39 PM

[aurora703:]

I agree with Rdurant (posted above) that Composite Technology (CPTC.ob) has great growth potential. The DeWind wind turbines have potential orders in the hundreds and may be finalized very soon. CPTC uses Voith WinDrive technology to produde unique wind turbine that may be unmatched in wind turbine manufacturing, and which Wall Street has yet to focus on.

CPTC also has a very lucrative business selling aluminum conductor composite core (ACCC) conductors, a composite core overhead electrical transmission conductor. They also manufacture and sell the composite core component of the ACCC conductor and various accessories. ACCC conductors enable grid operators to reduce blackouts and brownouts, providing a 'reserve electrical capacity' by operating at higher temperatures without significant thermal sag of the lines. This segment markets its cable to public, private, and governmentally owned utilities and transmission line operators. CPTC just received a US patent on their ACCC conductors.

Last, CPTC just received a significant investment by Credit Suisse, with an option to invest more. At only $1.02 per share, while there is risk, there is huge potential for stock price appreciation and growth with CPTC.

2008 May 26 04:39 PM

[footchester:]

I've owned CPTC for over one year now, and my opinion of it changes from day to day. (either headed to bankruptcy..again; or a perfect combo of wind turbines and the advanced cable to bring the power back to populated areas). After having owned it for a while, and read through its twisted history, I'd rate it as extremely risky, with a chance for almost as remarkable return, if all goes well and they get lucky.
In the turbine biz, theyare up against everyone from the better known companies like Gamesa and Vestas to the mega-corps liike GE and BP. and in the cable biz, 3M is a direct competitor with almost unlimited resources. So, no matter how much the 'synergy' of wind turbines and advanced transmission cable almost writes the 'perfect story' - this is no sure thing. But I'm not selling anytime soon.

2008 May 26 08:16 PM

[jjason:]

The article has a lot of info but what about price to book ratios, price to tangible book ratios, debt to equity ratios and total debt to equity ratios?

I find a lot of companies are selling for more than four times what they are worth and have too much debt. What is the point of writing articles that discuss badly managed companies...especially companies that are losing money?

2008 May 27 08:49 AM

[User 148301:]

Check out General Cable...BGC. They make low voltage power grid cables, and is exploding.

2008 May 27 09:32 AM

[geofisher1:]

I have owned TNB, TRN for some time based on the need to improve the ele ut infrastructure - the grid. I recently bought into BGC, and through them found CPTC. I like the analysis of William Blair - look to the ACCC market as its primary driver of profit and the wind stuff comes along for the ride. With the opportunity to greatly reduce grid line loss, the ACCC product will be the one to watch. Just think - do nothing but upgrade the transmission wire and the efficency of the entire system greatly improves - it is like adding more generating capacity. This is where the best future for CTPC lies - not in the fickle and speculative wind business.

2008 May 29 04:15 PM

[Ludlow Ener...:]

Also may want to take a look at Welwind Energy (OTC:WWEI) as a Chinese wind enegry company. Just coming online with their Chinese wind farms.

2008 Jun 04 01:00 AM

[microman:]

A recent entrant into the Wind sector is AETI (American Electric Tech). Here's the PR describing their electrical efficiency angle: www.aeti.com/news/news...

Here's a link describing AETI's power-related wind products: www.aeti.com/market/wi...

What I like about AETI is that their power efficiency niche could be one that is applicable to most all producers of wind towers. Add in the fact that AETI is already profitable with their base electrical business, and their oil/gas/China growth angle. With only ~7.5M shares outstanding, it wouldn't take much revenue/gross margin to boost EPS substantially. Mkt cap ~$50M

2008 Jun 05 04:36 PM

[Piggybank:]

As another poster mentioned here, the best and most surewin investment in wind energy is in the established wind turbine manufacturers. vestas, Gamesa, Nordex and add to that repower. I have stocks in al of them, the majority of my position, and they are absolutly great investments, not just in the alternative energy space alone. The turbine company's have years of strong growth ahead of them and their is virtually no risk atached. The outperform the current crisis ridden economy by a mile to. Just go check Vestas at mothley fools caps, it's about the only stock on that site that has a few thousand pitches on outperform and truly 0 pitches on underperform, everyone beliefs i this company, with good reason, i think it's easily the most easy stock pick to make on the whole world stock market, and the return is very good.

Clipper, as mentioned by the contributer, however is a company with far greater problems financially. I do not understand the contributer for mentioning the European turbine manufacturer that is Clipper but not mentioning Vestas.

I follow CPTC as a lion observing his prey though, if it starts moving bigtime ill be jumping in for sure.

2008 Jun 06 05:04 AM

[wind dude:]

Western Wind Energy (WND-TSX) has gone up 350% in the last six months...and they are expected to announce net earnings of 5 cents a share. They have an impressive pipeline...gross $6 mm a year. Are trading 400,000 shares a day. $100 mm marketcap.

2008 Jun 23 12:50 PM

[steven900106:]

after observing and working on a Vestas wind farm construction project, it is my opinion that their competition has some big shoes to fill.

Jan 21 07:35 PM

[James516:]

Check out GSAE.PK through their JV with Notos they are entering the wind energy market in Serbia first, then in Eurpoe.

They recently filed form 10, as the first step to get out of pink land....

Their CEO is going to be on an interactive interview chat at investornation.com.

Market Medias was compensated $25,000.00 cash for ONE month's service (April, 6th, 2009 to May, 6th, 2009), by a third party, for the (GSAE.PK) profile, MARKET AWARENESS, "company material" and advertisement’s regarding (GSAE.PK).

Apr 23 05:13 PM