Wednesday 24 July 2013

Analysis of PNE WIND

A german wind power plant constructor

Company: PNE WIND
Business: A German wind power company with focus on the development, realisation, financing and operation of wind farms on land and at sea, at home and abroad. So they do not produce the wind turbines like Nordex and Vestas but they organize the construction of wind power plants and they also run them on their own.

Active: They have 100 wind farm projects with a total rated output of around 828 MW already successfully completed in the German home market as well as in Hungary, Bulgaria, Rumania, Turkey, UK, USA and Canada.

P/E: 7.3

This excellent suggestion to the wind power companies was given by Falk in the comment here.

 containing values of P/E, P/B as well as dividend

The P/E for PNE WIND is great with 7.3 and add to that an acceptable P/B of 1.4 and we end up with a very clear buy according to Graham! The earnings to sale is with this company more like it with 20% however since they "only" construct wind power plants they do not need to spend money on R&D which probably improve their margins and also allow them to fluctuate as they have done in revenue the last couple of years without being forced to book big losses. The book to debt is also fully acceptable with 0.9 and the growth in the last five years has been 2.5% but like I said they have been all over the place in revenues in between 2008 and 2012. Still the motivated P/E for PNE WIND is around 12 to 14 which means that the market is today undervaluing the company. For the last three years they have paid a dividend that is currently 2.9% which represents only 22% of the earnings so plenty of space to increase.

Conclusion: PNE WIND looks like a very interesting company that are a clear buy according to Graham as well as according to the motivated P/E versus current market valuation. I must admit that even I got a little tempted with this company. It will definitely be added to my follow list thanks for the suggestion Falk!

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