NWF - NZ Windfarms

[fish]

Are these heading upwards?
Will they ever go above 0.14 cents?
What is the outlook?
PE is 8
Is it therefore, undervalued ?

The value is in the eye of the beholder
Market value is this moments shareprice
Value to me is far greater
I see a rise of say 2 cents far more likely than a fall of 2 cents in the next year-the share price will be supported by the buy-back
Then there is the possibility of a takeover offer that might push the price even higher

[Blue Horseshoe]

Some bigger numbers coming in on the buy side, might be an interesting week.

[DoctorG]

I bought some late last week, and now want to get an idea of whether I have been bought a winner or not.
I bought at 0.141.
So if they go up by 2c thats fine over a year, but it would be great if they went to $2, but that is very unlikely.

[fish]

I bought some late last week, and now want to get an idea of whether I have been bought a winner or not.
I bought at 0.141.
So if they go up by 2c thats fine over a year, but it would be great if they went to $2, but that is very unlikely.

No point thinking greedy or unlikely-stay in the real world and be happy with small gains-a takeover offer by one of the gentailers makes sense and is a real possibility in the twenty to thirty cents range-it should be worth far more to a gentailer than as a stand alone company.

[fish]

Some bigger numbers coming in on the buy side, might be an interesting week.

didnt eventuate-?lack of interest?why
This is one stock which is under-researched and probably given little thought about.
I like to keep an eye on global markets and research on energy.
Reading the special Energy Issue of Bloomberg Markets August/-vol 28 issue 4 page 47 shows in graphic tables the costs of electricity generation from all sources in china/usa/uk.
The cheapest is windpower.
It is also the cleanest.
Far cheaper that CCGT which I had thought would be the cheapest in the US where gas is abundant and cheap.
Pumped hydro was expensive
Gas peakers will be needed rather than CCGT.

[Aarrgghh]

Hi everyone
After doing a small amount of research on this company and re reading the last couple of pages of forum, I think that people are underestimating the risks of investing in NWF.

Here's my opinion / conclusions - but please be aware this was not exhaustive research.

What I was hoping to see:
* Low risk company - reliable equipment - stable returns
* To be a good take over target from one of the bigger players
* Ownership of land to leave residual value after turbines become obsolete
* Good value due to lingering bad taste after hedging screw up by management

What I found
* All wind turbines are manufactured by Windflow NZ, which is in serious problems. They were at one time listed on the NZ stock exchange, now on the Unlisted market. Looking at their website Te Rerehau is the only significant project which Windflow NZ has completed. Read their last annual report, in particular the Chairmans blurb for some of the least creative, least positive notes I have seen.
* This is a problem because the turbines seem to have a reasonably high breakdown rate. Check the NWF annual report for a list of required swap out equipment. It would appear that some information in the NWF annual reports almost directly contradicts some of Windflow NZ's marketting material - for instance the claim the turbines can produce power reliably in wind up to 100kmh. In my opinion there is a significant risk to operations at Te Rerehau if (when?) Windflow NZ goes under.
* Because of this I would be very surprised if any of the other big players would be interested in NWF for takeover.
* The value of the land owned by NWF is 3 million, and 32 of the turbines are on leased land - which seems like it is another point which may be a possible risk area.
* " The consent allows for a further 56 turbines to be operated in the future but there are no plans for an extension at this time." - I believe this line from the NWF website exemplifies both the problems which NWF is having with the existing turbines, plus the complete lack of foresight management seems to have had in the past few years - How do you possibly get hedging so wrong?

What I don't know
* If there is any ties I don't know between Windflow NZ and NWF - eg ownership or management etc.

What I would like to see
* Ditch the share buy back (which to me just seems bizarre), instead use the money to develop the remaining 56 turbines on the consent the company holds - but using proven international technology to ensure security of supply in the future. We are currently in a time of low interest rates and raising electricity demand so timing is good for this. Plus as someone posted above, the government has indicated support for wind projects also.
* Once that has been done implement a schedule of swapping out the Windflow NZ turbines to the more reliable alternative as they reach end of life.

And just because I thought it pretty neat - here is the current output of the NWF turbines http://203.114.161.10/trh.htm

[Arthur]

It is not as bad as you think. The issues that you have found are historic and well known. NWF bought a whole heap of spare parts from Windflow and do all of their own repairs. The have learnt how to manage well and have lowered the maintenance costs tremendously. The new management appears to have made some awesome changes. I wish they would reduce the dividend and do more of a buyback as that is more tax effective. Debt reduction would be good too as the bank appears to have them by the balls.

[Well Endowed]

the curtailment program has reduced wear and maintenance costs, whilst increasing turbine availability.

Agreed on the dividend, would much rather they pay down the debt or further support the buyback.


a happy holder here, and actually considering another top up soon.

[Dassets]

There is no link to Windflow. NZ Windfarms sources all it's own parts. None through Windflow. It also has rights to the original IP and then to all the improvements that have been made under NZ Windfarms initiatives. This happened years ago. If Windflow fell over it would mean nothing at all.

[Aarrgghh]

I hear what you guys are saying and appreciate the effort to reply

I guess for me the bottom line is that it's a well known fact the turbines are dogs. What other reason can you give for not finishing the original planned development?

If AIA turned around tomorrow and said they had slots to land 150 planes per day but had decided to only land 95, we would all agree they were mad.

I feel this is a similar situation, and the only logical reason I can see why you wouldn't develop is because you don't want to buy more doggy turbines, and the engineering resources to support only 50 turbines isn't economic.

Which for me doesn't seem to cry out takeover target.

Genuine question though - is there any other reason why they wouldn't develop the other turbines in their consent?