Canadian Hydro Developers a high-powered stock
The company generates about 364 megawatts through run-of-river, wind and biomass plants in British Columbia, Alberta, Ontario and Quebec. It also has several hydroelectric and wind projects in the pipeline.
However, permitting holdups have forced delays on some of those projects, introducing cost overruns. But for Mr. Isaacson, the company is worth the risk. “We believe the company is undervalued,” he said.
Mr. Isaacson expects Canadian Hydro Developers to add about 400 MW of capacity in the short to mid-term. The company's proposed Dunvegan hydro project in Alberta, which may be confirmed by the first quarter of 2009, will also be critical, he said.
“If commissioned on-time and within budget, this project could add up to $1.50 per share to (Canadian Hydro's) stock price,” he said.
Other selling points for Scotia Capital include a strong 19-year management track record and plenty of stock catalysts in the next 12 to 18 months as Canadian Hydro Developers continues to bid for new projects in British Columbia and Ontario.
Mr. Isaacson based his valuation on a 75%-weighted discounted cash flow approach using a 9.5% discount rate. He also used a 25% net asset value calculation.
Related News
Electricity Prices Surge to Record as Europe Struggles to Keep Lights on
LONDON - Electricity prices surged to a fresh record as France scrambled to keep its lights on, sucking up supplies from the rest of Europe.
France, usually an exporter of power, is boosting electricity imports and even burning fuel oil. The crunch comes after Electricite de France SA said it would halt four reactors accounting for 10% of the nation’s nuclear capacity, straining power grids already facing cold weather. Six oil-fired units were turned on in France on Tuesday morning, according to a filing with Entsoe.
“It’s illustrating how severe it is when they’re actually starting to burn fuel oil and importing…
