By Wali20 Aug 2014 09:39
Post recommended.. ------Directors bought in at 24p to 63p.
Before the Financial Crisis Arbuthnot Initiated Coverage with a Buy rating and target of 75p
"Arbuthnot Securities has initiated coverage on Renewable Energy Holdings Plc. with a ?strong buy? rating and 75 pence price target. In a note, the broker said it thinks the stock is undervalued both in terms of its installed asset base and its development portfolio. It notes that the renewable energy technologies operator has made substantial operational improvements and validation of its wet renewable energy offering, and Arbuthnot expects first pre-commercial deployment in 2009. Importantly, thinks Arbuthnot, the group is mitigated from energy, procurement and construction risk as EDF Energy has a mutual interest in the business as a shareholder and a joint venture partner in CETO. It adds that with rising wind farm development costs and turbine procurement in short supply, it thinks Renewable Energy can leverage this unique position to de-risk its expansion plans."
There are 3 major parts to REH business.
1. Shares in Carnegie Wave Technology (ASX:CWE) which is doing well with strong demand for the shares in Australia. CWE is now valued at $70m. REH own almost 10% of shares in CWE.
2. Polish wind farm project 30MW
3. Wales wind farm project 80MW
A Broker Note from October 2010 estimated sum of parts value at over 40p per share. Since then the wind farms have come closer to completion. So the 110MW of wind farm capacity could be worth 110MW x £1.2m or over £130m+ ?
Some part of valueation.
As the group already has planning in place for Poland (Kobylany, 30MW), we use 15% of the fully constructed value (for which we estimate an average of £1.2m/MW) estimating the current value of these windfarms at 6.9p/REH share. For the group’s windfarm in Wales (Sweetlamb, 69MW) we have used 7.5% of the fully-built cost which works out at 5.3p/REH share. Based on these assumptions, REH’s windfarm pipeline is worth around £11.3m equivalent to 13.4p / REH share.
Cash is estimated to be 10p per REH share. With respect to the group’s holding in Carnegie Wave Energy (ASX:CWE), we have used the current market price of the shares to value the stake although the REH stake is subject to a lock-up until the 23rd December 2010. We estimate the group’s book value by year-end December 2010 at 41.7p/share (fully diluted) virtually in line with our estimate of underlying asset value of 41p/share."
http://www.lse.co.uk/DirectorsDeals.asp?shareprice=REH&share=renew_energy
http://www.proactiveinvestors.co.uk/LON:REH/Renewable-Energy-Holdings/index/brokerpresses
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