Sydneyguy noticed you’re not keen on BBW now. It’s the baby in the bath water! I’ve spent a long time on this one, I know she will outperform.
She was only down a bit on index, considering she is a BNB stock and on large numbers after 2pm, I think that shows solid support. If the fundamentals were not there, she would have tanked with the rest of them.
After a very reflective day watching the mothership (in fact most of the fleet, reefed by pessimism) I stand here, absolutely convinced that BBW and all who sail on her will do very well!
Like you, I am disappointed with BNB, to date my paper BNB loss is over 500k and I don’t expect that to come good anytime soon.
On BBW a remarkable profit should be announced soon, debt will be reduced, asset valuations will rise, long term energy costs & renewable targets will rise and the wind will always blow for free (as other input costs continue to increase).
We have only started to see the impact of climate change on the electricity market. We all know it’s only going one way.
Forget the short term cowboys entering the space and trust the facts. We should get an indication by the BNB results on Thursday of what they are selling and profit amount expected. I recommend to jump in during her lows today.
If we look at the negatives of BNB and compare with BBW:
1) There are no negative asset valuations.
2)There are no funding pressures, debt will be reduced post sale.
3) Claimed BNB model is dead, but this fund is in a definite growth segment with renewables in demand and a massive pipeline to come.
4) They still have a massive amount of assets post sale that could generate substantial profits in order to carry out further developments if required.
5) Distribution yield set to rise for FY09 while interest rates heading south (15.5cps, 11.1% yield on yesterdays price, cap return).
The only negative is BNB is the manager. They have been given a big kick, so you would expect a change in policy on that front in the short term.
I hope they only sell enough to prove its value and reduce debt to an acceptable level. They need to geographic diversity to keep income steady.
They will come good, just a bad time. cheers
Whats the saying " buy when everyone is selling, sell ...........
Cheers,
MODYOR
BBW
babcock & brown wind partners group
