I think it is o.k. to buy at under 40 cents (leaving some cash on the side so that if it goes down you would buy more) that is assuming a 1 cent a quarter profit so it is 10x with an easy project as the next one.. Pricing in the united states is not that good because of nat gas and the 1 percent yearly increase is not that exciting... You are getting growth and risk because the projects can go bad.
You haven't missed the time to buy. I would wait to buy until 2nd qtr earnings come out in August. Even though I expect the stock to do well long term, I think 2nd qtr earnings will be down - definitely a miss from the analyst estimate of 2 cents. I think they will be down for the following reasons:
1. They indicated in the conference call that there were major outages at Neal in order to make some improvements.
2. The Neal PPA rate for April and May is only 73% of the baseline rate.
3. the 2nd qtr is much warmer than the 1st qtr and will drive lower production.
4. They are paying 9.5% on the SE construction loan which is higher than it should be long term.
If share prices drop to the 30 cent range, I would consider buying earlier.
I expect improvement starting with the 3rd qtr as they make progress on getting higher availability from Neal and rates will be higher. the 4th qtr should be a blowout qtr with colder temps, rates for Nov & Dec at 120% of baseline and hopefully both Neal and SE operating smoothly. When 4th qtr and full year results are released next March, the share price should be much higher than today.
There are still some long term risks that need to be watched. The most dangerous is if brine temps drop much faster than they assume (3%). A rapid decline in brine temps is what ultimately forced Nevada Geo into bankruptcy. Also, we still don't know the Enbridge share of Neal and the long term financing cost for SE.
Been hearing variations on this bunk for years now- that is, 'soon' this will have proved a good "long term" performer. In the meantime, you just keep pouring $ down a never ending HTM black hole!
I'd be surprised to see it go below $0.36 again if everything remains on track. I'd be buying more if that happened. The current price of $0.375 is still a pretty good entry IMHO as the price was over $0.43 just a week or so ago the last time there was strong volume.
Sentiment: Strong Buy