Either way, last quarter the company increased revenue 85% and profits 79%; backlog nearly doubled and I believe they are sandbagging earnings estimates with a very large range of $1.04 to $1.34. Analysts are in at $1.14. Their contract flow is fantastic and excluding any major surprise this stock is an outright steal at 17x forward earnings for where they are placed. Further updates on the wind business should help drive investment sentinment - but again, until more long term investors "buy in" this stock will just be rolled around by those currently in power.
Technically, the stock is at the low end of its recent range of $20-$23; we'd want to be buyers (adders) on a technical breakout over the 50 day moving average - north of mid $23s to show this stock has any sustained move to it, but for now there is an earnings update coming Monday which could be a catalyst. However, we've seen many other small cap Chinese stocks report 70, 80, 90, 100% growth and sit ignored so there is no guarantee. But I do believe the wind power catalyst might differentiate APWR; if not now - then into 2009.
We're adding in the $20.00s and taking this up to a 2.7% stake. I should add a stock acting so poorly ahead of earnings usually bodes poorly - so we'll reevaluate Monday post earnings. The 200 day moving average is down at $18 and short of announcing bankruptcy Monday, if the stock is tossed down there I'll add more there next week. I believe this stock has potential for $40+ by end of 2009, as the wind business should deliver a new $2+ of EPS by 2010. But stock price today or next week? Who knows. The company has recently filed their annual report - a very unique opportunity.
As an aside, oil is down a buck or two today - so as with the old football analogy - student body left (sell commodities, jump into consumer discretionary and financials), as opposed to student body right (buy commodities, jump out of consumer discretionary and financials). This is nothing but a traders market. Tell me the price of oil every day, and I flip my portfolio 180 degrees every night. That's all we are in right now. Yesterday the consumer was in trouble, today the consumer is just fine - thank you. Because oil moved $1.50. Oh yeh, we might get rid of Lehman Brothers (LEH) saga as well... therefore all our problems go away ;) Oh yes our 'free market capitalists' are also cheering on the 'socialism' that is the coming Freddie Mac/Fannie Mae 'intervention'. Nothing like the government using people's tax dollars to make 'free market capitalists' joyous. I love irony. Buy stocks; the government has your back (with your own money of course)
[Jul 23: A-Power Energy Signs $300M Contract with Thailand]
[Jul 14: A-Power Energy Generation Systems Hot and Heavy with Press Releases - Up Another 7%]
[Jul 9: A-Power Energy Generation Up 15% on Announcement of Completion of Largest Wind Turbine Plant in China]
[Jun 27: New Position in A-Power Energy Generation Systems to Create Alternative Energy Mini Basket]
Long A-Power Energy in fund and personal account
