Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
Enel, SpA of
is also a member of the Test Center Network, a recently formed alliance to
accelerate development of technologies to capture and store harmful carbon
dioxide emissions.Like Southern Co.
(SO:NSYE), the U.S. based utility profiled in the
last post, Enel has a vested interest in securing a place to hide away the
carbon dioxide emissions spewing out of its fossil fuel driven power plants.
Governments around the world are moving
forward with mandates to increase renewable power generation and reduce
emissions.Unfortunately, renewable energy
sources have been slow to come on line. Staying in compliance with emissions standards
means CO2 from coal- and oil-fire power plants will have to be hidden away like
a child hides Brussels sprouts under the table as Mom looks for clean plates
around the dinner table.
Enel is a fully integrated power utility
serving over 60 million customers in forty countries. Its power generating capacity exceeds 97,000
megawatts.Its operations in the U.S.
and Canada, Enel
Green Power (EGP), rely exclusively renewable energy technologies
-hydroelectric, geothermal, wind and
biomass.EGP owns and operates over 70 plants
in North America with an installed capacity of around 1.2 gigawatts.
Enel is developing a
small-scale pilot project at its Brindisi test facility to prove out a post-combustion
capture and storage approach to reducing CO2 emissions.Then a demonstration plant will be built at Enel’s Porto Tolle clean coal power station.Norway's Aker Clean Carbon has been chosen to provide the carbon-capture technology.
The European Commission
is making funding for the projects available through the European Economic Plan
for Recovery.When plans for the pilot
were announced Enel announced the price tag for the demonstration plant could
reach $1.4 billion.The company cited
competitive advantage as the driving force behind project despite the seemingly
high capital requirement.It is seen as
the only way to lift the environmental credentials of coal-fired power plants.
The company’s stock trades on the Milan exchange
under the symbol ENEL. The stock trades about 30.2 million shares a day.For U.S. investors with no palate for
tracking down stocks on foreign exchanges can grab a few shares through a
quotation on the U.S. Over-the-Counter Quotation Service under the symbol ESOCF.However, trading is considerably more
shallow-36,000 shares a day.Shares of Enel Green Power also trade on
three exchanges in Germany under the symbol ENZ.Unfortunately, trading volumes are “by
appointment,” making it difficult to build a position of size.
Based on trailing earnings, Enel shares trade
at a multiple of 8.0 times.Other
electric utility companies trade at considerably higher multiples near 16.0 to
18.0 times trailing earnings.A heavy
debt load might give some investors a pause before taking a long position in
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies