SP14 Feb 2025 14:08
It will reach a point soon where value is deemed too much to overlook, rates turn or both.
I don’t think it’s the companies fault. They have announced an increase in dividend again and completed a 100m BB.
Leverage is high but by no means the highest and the lower interest rate long debt is further out. Everything is well covered including dividend within the income profile. Even with 7% less wind speed in one month - January!
The charts show that wind speeds whilst having unpredictable arrival patterns average out over time.
The SP is as always a product of buying and selling. Which is then a product of fundamentals which is then a product of macro.
So atm with T bonds in the US punching 4.6% for virtually no risk that’s where insti money is heading.
That’s the macro story irrespective of the quality in UK wind or other renewables, or REIT’s for that matter!
It’s credit to UKW that the yield is less than 9% as others in the same sector are pushing 12%!
If you think rates are gonna come down then this is a contrarian play, ahead of the market.
One can’t have cheap and high yield and necessarily a rising SP at this stage of the macro cycle.
I have been averaging into the sector over time, as its impossible to call the bottom, and view this as a one off opportunity to bag some quality well covered high yield for my pension.
So will continue to accumulate these opportunities as I can
Imo, buyers will return once rates come down but I won’t be buying then!
Usual caveats
Trek
Sign In
Follow the stocks
