Stock Alert for Broadwind Energy Inc. (BWEN)
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    Stock Alert for Broadwind Energy Inc. (BWEN)

    Broadwind Energy Inc. is a provider of technologically advanced high-value products and services to energy, mining and infrastructure sector customers, primarily in the U.S. The Company’s most significant presence is within the U.S. wind industry, where the Company believes it is the only independent company that offers its breadth of products and services to the market. BWEN’s product and service portfolio provides its customers, including wind turbine manufacturers, wind farm developers and wind farm operators, with access to a broad array of component and service offerings. Outside of the wind market, the Company provides precision gearing and specialty weldments to industrial customers, particularly in the energy, mining and infrastructure sectors.  

    Share Statistics (22-Nov-11)   FY

    2009

    FY

    2010

    %

    Chg

    Q3

    2010

    Q3

    2011

    %

    Chg

    Symbol BWEN Revenue, $Mn 184.80 136.90 -25.9% 34.02 47.90 40.8%
    Current price $0.72 Gross marg. 6.4% 1.4% -78.1% -0.6% 1.5% -350.0%
    52wk Range: $0.26-$2.52 Oper. margin -50.6% -13.5%
    Avg Vol (3m): 1,161,440 Net margin -59.6% -62.2% 4.3% -24.4% -13.8% -43.4%
    Market Cap. 100.61M              
    Shares Outstanding 139.73M EPS, $ -0.55 -0.41 -25.5% -0.07 -0.06 -14.3%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of BWEN spiked over 35% yesterday after the company announced it will manufacture welded sub-assemblies for Caterpillar’s (NYSE: CAT) lines of large draglines, crawlers and excavating equipment. Nearly 8 million shares traded hands during the session, versus the 10-day average of 2.64 million.  The stock is currently trading above its 50-day moving average of $0.41 and below its 200-day moving average of $0.96.

    Shares of the Illinois-based wind energy technology company have gained 80.4% in the last five days and 63.0% in the last month.  Year-to-date, the stock is down 57.6%.

    According to the press release, the components will be produced in BWEN’s facilities in Abilene, Texas and Manitowoc, Wisconsin. Along with the expansion of the Company’s wind tower business in 2012, the work for Caterpillar is expected to create 50 new jobs.

    “This collaboration fits well with our strategic initiatives to leverage our core competencies beyond the wind industry and diversify our revenue base. We believe this is the first step in expanding our relationship with Caterpillar as we continue to collaborate,” commented Paul Smith, president of BWEN.

    BWEN shares got a boost earlier this month after the Company announced that Siemens has chosen the Company to supply 36 locally manufactured towers for the expansion of the MidAmerican Energy wind project in Iowa.  Siemens has also entered into an option for an additional 25 towers.

    According to Kevin Hazel, vice president of supply chain management for Siemens Energy’s Wind Power Americas business, BWEN’s capacity and location, coupled with extensive experience fabricating taller and heavier towers, made it an ideal partner for Siemens in Iowa.

    BWEN expects to deliver the towers to Siemens during the second and third quarters of 2012.  To date, the Company has manufactured more than 1,000 towers.

    Source: http://www.bwen.com/News_8.aspx

    Financial Summary

    BWEN reported sales of $47.9 million for the third quarter of 2011, a 41% increase compared to $34.0 million in the third quarter of 2010. The increase was attributable to a sharp increase in Tower segment revenues compared to the prior year third quarter. For the year-to-date period, sales totaled $130.8 million, an increase of 46% versus the prior year-to-date period.

    The Company reported a net loss from continuing operations of $6.6 million or $0.06 per share in the third quarter of 2011, compared to a loss of $7.3 million, or $0.07 per share, during the third quarter of 2010. The improvement against third quarter 2010 was the result of higher sales, lower operating expenses and lower amortization expense in the current year. The improvement was partially offset by $0.6 million in expenses associated with restructuring activities and higher legal expenses of $0.8 million. For the year-to-date period, the operating loss narrowed to $14.5 million, down from a $32.1 million loss reported for the first nine months of 2010.

    At September 30, 2011, BWEN’s cash, marketable securities and short-term investments on hand totaled $13.0 million, and $0.1 million of the Company’s $10 million credit line was drawn. Outstanding debt totaled $12.5 million at September 30, 2011. A $5.1 million portion of the Company’s long-term debt was reclassified to current as a result of the decision to sell the Brandon tower plant, which secures this loan.

    http://www.bwen.com/BroadwindEnergyIncAnnouncesThirdQuarter2011Results_9096.aspx

    Financial Strength (22-Nov-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 0.96 1.21 0.81 0.77
    Current Ratio (MRQ) 1.56 1.72 1.09 1.14
    LT Debt to Equity (MRQ) 5.13 158.53 15.95 108.66
    Total Debt to Equity (MRQ) 7.73 164.96 20.58 146.14
    Interest Coverage (TTM) -90.62 1.75 4.14 26.74

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    BWEN is above the upper Bollinger Band, implying that it is currently extended from its recent trend. Be aware, however, that a cross outside of the Bollinger Bands can sometimes be a signal of trend strength and not, necessarily, trend reversal.

    The MACD for BWEN currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Nov22-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Woodward Inc. WWD 37.93 2.61B 16.64 14.48 1.38 1.27
    Mass Megawatts Wind Power Inc. MMMW 0.09 940.23K n/a n/a n/a n/a
    Industrial Electrical Equipment Median       12.48 n/a 1.08 n/a
    Broadwind Energy Inc. BWEN 0.71 99.18M n/a n/a 0.55 0.47

    Source: Thomson Financial

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