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.
of geothermal power producer Ormat
are trading at 29.2 times the 2014 consensus estimate of $0.93 per share.That multiple looks fair compared to growth
expected at Ormat in the next year, but more dear against the company’s
long-term growth prospects.The stock
has been flying off recent project developments.
early September this year, the company completed construction and commissioning
of a 100 megawatt geothermal plant in New Zealand, making it the world’s
largest geothermal power plant of its kind.Straight off the job in New Zealand Ormat entered into a joint agreement
with eBay (EBAY:Nasdaq) for the
development of a five megawatt recovered energy generation plant to supply power
to eBay’s data center in Salt Lake City.Just two weeks ago Ormat also signed a second agreement to develop a 60
megawatt geothermal project in Indonesia.
delivered $539 million in total revenue in the past twelve months. Unfortunately,
the net result was a deep loss of $205.6 million or $4.47 per share.Ormat recorded an impairment charge of $263.4
million related to its North Brawley power plant located in Imperial County,
California.The impairment charge was
taken after the company made a decision to operate the power plant below
the impairment charge Ormat has been a consistently profitable company.Cash flow from operations totaled $323.6
million in the last three fiscal years, representing conversion of 24.4% of
sales to cash.In my view, impressive
cash generation helps justify the forward earnings multiple.
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies