But if by December 2009 the company hits the midpoint of its guidance, and anyone on this planet still think companies growing 50%+ year over year are worth a 10 PE than APWR should be worth $22.50 in 15 months. That is nearly 200% higher than today's price which is under $8. Frankly I think the multiple should be much much higher, and obviously you can do the math if a 15 PE or 20 PE is ever bestowed upon such a fast growing company.
Even on this year's earnings, which end in 3 months APWR is on track to earn $1.15, which again - at these prices would derive a 7 TRAILING PE if the price holds for another 3 months, on >50% growth.
Maybe it goes to $6, or $4 or $2 first. In this market anything is possible. I will assume at some point in the next 15-20 months some semblence of non panic will return and a 10 PE for 50% growth won't be outrageous. With the nearly 50% haircut in these past two weeks, I'm willing to begin to rebuild this position, and I'm upping it to a 2.2% stake. If I had any confidence than anyone else cared about such valuations and were buying "value" I'd increase the stake more, but right now this stock is an orphan (along with a dozen others of similar ilk I could see as incredible buys at these valuations) so there is no reason it can't sit wilting in the sun for a long period of time. I don't know when valuation will matter again to this market but sometime in the next 2 years it must.
The company announced yet another deal last Friday that no one cared about. Their backlog continues to grow....
- A-Power Energy Generation Systems, Ltd. (Nasdaq: APWR - News; "A-Power"), announced today that it has signed a new contract with Jilin Glad Group Co., Ltd. to build two distributed power generation stations in Shulan City, Jilin Province, China with a total contract value of approximately $195 million. Jilin Glad Group Co., Ltd. was established in November 2002 and specializes in the operation of thermal power plants in China's Jilin province.
- This two-phase project is expected to begin in September 2008 with installation of a 24MW power station valued at $54 million. Completion of the first phase of the project is estimated for October 2009. The second phase of the project includes a 100MW distributed power generation system valued at $141 million and is expected to begin in January 2009 with completion date to be determined after commencement.
- With this contract, A-Power's distributed power generation backlog has grown to exceed $800 million, up from approximately $650 million as of August 20, 2008.
