One of my alerts of previous months was Wind Works Power Corporation (WWPW).  It was a great stock for members!  When I profiled WWPW on November 19th, 2009 it opened around 88 cents and hit an intraday high of $1.40 just three days later. That is a potential gain of almost 60%.  Since that time,  however, the stock has “taken a break”.  It has retraced all of that gain and is trading below my alert price.  I think the time is right to take another look at WWPW.

I like wind power. I believe that it is one of the energy technologies that will help get America off the oil habit.  The challenge with companies is realizing that promise.  The high-profile “crash and burn” of Texas billionaire, T. Boone Pickens, and his failed mega wind farm in TX is just one of the black eyes the industry has gotten in recent years.

However, I understand more about WWPW and I like their business model. I have kept it on my trading radar and have talked to their IR people and I understand even more about the company.  If you read their PR and peruse their website, you will notice that they have an impressive array of projects in Canada and around the globe.  The challenge for an investor is to look beyond the hype and see if there is a business there.  I could say that I am a wind farm developer but without utility contracts, contracts with landowners, and financing, I am just a promoter.  WWPW appears to be much more than a promoter, BUT….

The important thing to understand with WWPW is that they will never complete a single wind farm project!

I will let you digest that fact for a moment.  What WWPW does is “packaging”.  They have a management team that has done before exactly what WWPW is contemplating now.  I will use their Canada operations as an example.  Currently, the company has 190 MegaWatts (MW) of wind power on the drawing boards (spread over 15 different projects).  With land locked up, plans drawn up and utility power purchase agreements in place, these projects are VERY VALUABLE.  The value of these projects is derived by applying a dollar sales multiple per megawatt and also factoring the ongoing revenues from the profits interest WWPW will retain.  According to the company, those 190 MW’s could conceivably demand a purchase price (from a utility or another energy company) of $500,000 per MW and also the company would keep a net profits interest of 5 to 20%.

Do the math in your head and it appears that WWPW could be a very valuable company in the near future.  At 53 cents, WWPW seems cheap to me based upon expectation of future earnings. I will use another company similar to WWPW as corroboration of my point.  Recently, Schneider Power, Inc. (SNE.V) was purchased by Quantum Technologies for what appears to be a high premium, but what initially drew me to SNE was that they had sold one of their wind projects off recently for a good price.  Read release here.  Schneider sold their interest for over $5 MM  and retained a profits interest going forward of up to 20%.

I apologize for going long in this blog, but I want my readers and members to understand the opportunity as I see it.

Here is the chart…which is attractive in its own right.  See my notations on the chart.

I plan on trading WWPW (probably today) and have a good feeling about it.  It is a company that has a quick path to profitability… and don’t forget that it has another 210 MW that are located in the United States and Europe that are in various stages of development.   Here is a link to an investor presentation nested on their site that makes a very strong case for WWPW (as you would expect it to) - Investor Fact Sheet

I have so much more on this company, but since I am not trying to write ‘War and Peace’, I’ll save it for another time.  WWPW might be worth taking some time to get to know.

Good luck and good trading

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