The quest for a wind play

I got excited when Jim Cramer found a pure wind play Broadwind Energy (BWEN.OB), but then I started to look at the fundamentals.

With the recent Cramer bump, this company has a market cap of $1.3 billion with revenues of only $30 million in 2007. While this is a fast growing industry and revenue can increase, there isn't any room for a margin a safety and this stock is a huge gamble.

To find more about the company, I started reading its 10k forms and see what the company is about. One thing that I noticed is that the management hasn't been using US GAAP for its financial records, and has hard time organizing its financial statements with all of its recent acquisitions.

I will give the management the benefit of the doubt here because this is a young growing company, and they didn't really have the need to use GAAP in its records. The management is aware of this problem and will probably eventually get it straight. Regardless, it shows that the management doesn't have a firm grasps on all aspects if the company, and there is a lack of transparency.

Fellow Covestor member yaktipper mentioned the wind company A-Power Energy Generation Systems, Ltd. (APWR), which happened to be the only company that doesn't have a website. I tried looking at the SEC filings to find more about it, but I still don't know exactly what this company does. It is also based in China, and I am looking for a US wind play on the basis that the US has lots of capacity for wind energy. I don't know how economical it is to transport wind towers overseas vs building them here.

So I am still looking for a solid pure wind play. BWEN and APWR have potential, but there is too much risks for the price for my taste. There aren't any companies that have strong fundamentals at a reasonable price other than big conglomerates.

Even though I think wind is the best source of alternative energy, I won't invest in it if I don't see the right opportunity. It's unfortunate, but hopefully I will find a good play if I am patient.