NEW YORK (
(BWEN - Get Report)
hasn't been a winner for green energy investors.
In 2010, the U.S. wind market suffered through its worst year in recent history, and Broadwind shares plummeted. Timing wasn't great for Broadwind shares bottoming out, either, as the company received a big endorsement from JPMorgan's sell side team, a buy call that turned out to be badly timed and burned investors.
Broadwind shares are currently trading at $1.42, vs. a 52-week high of $3.83. It's been more or less straight down for Broadwind shares since the beginning of 2010, when shares were as high as $10.
In its recent investor day presentation, Broadwind noted that revenue had improved year over year, from $21.7 million in the first quarter of 2010 to $43.5 million in the first quarter of 2011. The company's wind tower business saw revenue increase year over year from $12 million to $28.2 million. The company's gearing business, where it is shifting focus to traditional energy and mining, increased revenue year over year in the first quarter from $7.7 million to $13.6 million.
However, it's important for investors to remember that the year-over-year comparisons include the trough year of 2010 in the U.S. wind sector. Any improvement does not necessarily equate to sustianable improvement and share growth.
|Peter Duprey, CEO Broadwind Energy
Nevertheless, the energy company's CEO, Peter Duprey, tells
that a recent shift away from being a pure-play wind company focus will help the company turn things around.
TheStreet: Why should an investor believe in Broadwind stock, or any green energy stock, given the recent history and lack of sustained growth in shares?
This industry will ebb and flow with fossil fuel prices, and we are in a low natural gas price cycle now. I think investors need to take a long-term horizon, with demand around the world for energy increasing and energy prices and energy stocks increasing over the mid- to long term, for Broadwind specifically, we are diversifying from 100% wind to a structure closer to 50%/50% wind energy and industrial, servicing the oil and gas and mining sectors.
I think we have a few things in our favor, with the wind industry is improving over 2010 and with a diversification play primarily in oil and gas and mining. Those two factors bode well for Broadwind.