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
Britain Prepares for High Winter Heating and Electricity Costs
LONDON - The government organization that controls the cost of energy in Great Britain recently increased what is known as a price cap. The price cap is the highest amount that gas suppliers can charge for a unit of energy.
The new, higher cost has people concerned that they may not be able to pay for their gas and electricity this winter. Some might pay as much as $4,188 for energy next year. Earlier this year, the price cap was at $2,320.
Why such a change?
Oil and gas prices around the world have been increasing since 2021 as economies started up again…
