Jump to content
Sign in to follow this  
dydo

Clearway Energy, Inc. (CWEN)

Recommended Posts

NYLD has done well since last few weeks. Time to sell and see how things play out, or hold for further gain? Explo, do you have any opinion on why it dived so much from May? Also suspicious as usual is Morgan Stanley (i think they one of the biggest shorts on WS). They put out a conviction buy type reco just before it tanked !

 

Share this post


Link to post
Share on other sites

Honestly I haven't done much DD on yieldcos. I saw and opportunity after they crashed and just managed risk by buying many on the cheap.

Share this post


Link to post
Share on other sites

“People used to associate dividend stocks with value,” says John Bailer manager of the $1.1 billion BNY Mellon Income Stock Fund (ticker: MIISX ), “A lot of my competitors are buying bond-proxy oriented stocks, blue-chip, high-quality, never sell ‘em stocks, which are, unfortunately, very expensive.”

"Created by NRG Energy to buy and hold solar and wind assets in July 2013, NRG Yield is the original yieldco. At the time, Wall Street analysts hailed the creation as being transformative. Of course, SunEdison’s spectacular flameout, and its yieldco TerraForm Global’s (GLBL) 80% decline in under a year to a recent $2.58, has given the usually safe investments a bad rap. Bailey says NRG Yield is misunderstood and underappreciated. At a glance, NRG Yield’s debt of some $4.7 billion, nearly triple its $1.6 billion market value, looks alarming. “The difference between NRG Yield and other yieldcos is that NRG has self-amortizing debt,” says Bailer, which he likens to a mortgage. “This debt does not need to be refinanced,” he says. “They also have strong counterparties with regulated utilities.” Bailer sees its dividend rising 30% to $1.20 by 2018 and has a target price of $27. Shares recently at $16.38 have a juicy yield of 5.8%. "

I looked with amazement how it traded at 17.80 to drop to 17.30 today. On impulse, I sold my 16.70 shares and bought PEGI with it, sold PEGI at the breakeven 23.87 and bought NYLD. I hope it works.

Share this post


Link to post
Share on other sites

I know that there is a sour mood in the solar land these days, and we are looking into a rough patch for about one year when it comes to manufacturing.  As you know, I always hunt for the opportunities and positive view when misery is lurking.

I have looked at both PEGI and NYLD from many angles. Today I have decided to switch my weight around to NYLD. Mostly I used PEGI coming to my buy price and as mentioned watched the NYLD go up as much as 17.80.

The average price target on the stock is $20, but I dug up in another posting view of $27 per share.

I think NYLD is going to explode relatively soon with solar and wind projects. NRG Energy parent is bidding for about 2.1GW of projects from SUNEQ.  I suspect they will get most of it.  To do it NYLD just sold $350M in bonds and opened up $150M ATM. Their dividend uses only about 70% of CAFD. They are moving into solar and wind projects big time. Parent while in red has roughly $1.5B in cash.

While PEGI has excellent yield, their balance sheet is not so great, even when it will be significantly improved by recent equity sale. 

I thought I would share this with the forum. In my simple view, benefits of getting some or all of those SUNEQ assets will give a huge advantage to NRG and the NYLD.  I suspect that someone may be buying shares ahead of announcements.

PV-Magazine put this note on Friday

http://www.pv-magazine.com/news/details/beitrag/nrg-move-to-acquire-sunedison-assets-moves-forward--expands-to-dg_100025855/#axzz4IDZobXRP

 

Share this post


Link to post
Share on other sites

Looks like NYLD may get competition for the SUNE assets.

Sent from my HTC One_M8 using Tapatalk

Share this post


Link to post
Share on other sites

NYLD completed its solar acquisition and issues new deck for Barclays conference. Based on current price of shares dividend would be at 7.8% . That implies 42% growth from $0.96 to $1.38 by end of 2018.  At the current rate that is $23, but I would say target goes up to $25 per share.

http://investor.nrgyield.com/phoenix.zhtml?c=251846&p=irol-EventDetails&EventId=5236704

Share this post


Link to post
Share on other sites

The participation in bids for utility assets have closed today, they have an auction on the 9th. I looked at the details those are actually utility size built projects, 684MW of wind and 1402MW of solar, both DC. In AC this is about 1.6GW. At $144M this is about $0.10 per watt. That is a steal if it happens. If SunEdison had 10% in equity at 1.70 this would be $0.51,

NRG Energy would be buying it at 20 cents on a dollar of equity. Great deal and I hope it happens. This would mean massive drop into NYLD. MYLD is already the largest yieldco with those projects in, NYLD will probably sell them with 100% gain of 20 cents versus 10 cents, or $288M plus debt, this would be easy gain and NYLD would have awesome assets.

Share this post


Link to post
Share on other sites

I found the announcement that NRG Renew is the successful bidder  and its purchase prevailed for all assets in this motion

"At the Sale Hearing to be held on September 15, 2016 at 10:00 a.m. (prevailing Eastern Time) before the Honorable Stuart M. Bernstein, in the United States Bankruptcy Court for the Southern District of New York, One Bowling Green, Courtroom 723, New York, New York 10004, the Debtors will seek entry of an order, approving the sale of all of the Equity Interests free and clear of all liens, claims, interests and encumbrances to NRG. "

I cannot know for sure this is a good as I thought originally, I have no doubt it is a great outcome for the industry. A public entity is taking on the projects, plants, etc. Creating work perhaps for CSIQ, FSLR, moving the bankruptcy into past and getting things to normal.

 

Share this post


Link to post
Share on other sites

That's great news. If I remember correctly NRG is a decently but not super strong (financially) sponsor - not like NEE and BAM - so I hope they don't stretch it too much now (like SUNE and ABG did).

 

Share this post


Link to post
Share on other sites

Further study shows that NRG is buying Four Brothers and Three Cedars projects, those are coming according to Dominion this quarter, Quoting from Dominion filing is below and those are 530MWac operational in Utah. 231MW in Hawaii, also operational. 1.2GW as pure not started projects, including 683MW of wind.

Acquisitions of Four Brothers and Three Cedars
In June 2015, Dominion acquired 50% of the units in Four Brothers from SunEdison for $64 million of consideration, consisting of $2 million in cash and a $62 million payable. As of June 30, 2016, an $11 million payable is included in other current liabilities in Dominion’s Consolidated Balance Sheets. Four Brothers’ purpose is to develop and operate four solar projects located in Utah, which will produce and sell electricity and renewable energy credits. The projects are expected to cost approximately $730 million to construct, including the initial acquisition cost. Dominion is obligated to contribute $445
million of capital to fund the construction of the projects and has contributed $370 million through June 30, 2016. The facilities are expected to begin commercial operations by the end of the third quarter of 2016, with generating capacity of approximately 320 MW.
In September 2015, Dominion acquired 50% of the units in Three Cedars from SunEdison for $43 million of consideration, consisting of $6 million in cash and a $37 million payable. As of June 30, 2016, a $7 million payable is included in other current liabilities in Dominion’s Consolidated Balance Sheets. Three Cedars’ purpose is to develop and operate three solar projects located in Utah, which will produce and sell electricity and renewable energy credits. The projects are expected to cost approximately $425 million to construct. Dominion is obligated to contribute $276 million of capital to fund the
construction of the projects and has contributed $223 million through June 30, 2016. The facilities are expected to begin commercial operations by the end of the third quarter of 2016, with generating capacity of approximately 210 MW.
Long-term power purchase, interconnection and operation and maintenance agreements have been executed for both Four Brothers and Three Cedars. Dominion expects to claim 99% of the federal investment tax credits on the projects.
Dominion owns 50% of the voting interests in Four Brothers and Three Cedars and has a controlling financial interest over the entities through its rights to control operations. The allocation of the $64 million purchase price for Four Brothers resulted in $89 million of property, plant and equipment and $25 million of noncontrolling interest. The allocation of the $43 million purchase price for Three Cedars resulted in $65 million of property, plant and equipment
and $22 million of noncontrolling interest. The noncontrolling interest for each entity was measured at fair value using the discounted cash flow method, with the primary components of the valuation being future cash flows (both incoming and outgoing) and the discount rate. Dominion determined its discount
rate based on the cost of capital a utility-scale investor would expect, as well as the cost of capital an individual project developer could achieve via a combination of non-recourse project financing and outside equity partners. The acquired assets of Four Brothers and Three Cedars are included in the Dominion Generation operating segment.
Dominion has assumed the majority of the agreements to provide administrative and support services in connection with construction of the projects, operations and maintenance of the facilities and technical management services of the solar facilities. Costs related to services to be provided under these agreements were immaterial for the six months ended June 30, 2016. Subsequent to Dominion’s acquisition of Four Brothers and Three Cedars through June 30, 2016, SunEdison made contributions to Four Brothers and Three Cedars of $265 million in aggregate, which are reflected as noncontrolling interests
in Dominion’s Consolidated Balance Sheets.

Share this post


Link to post
Share on other sites

Owned by SunEdison and sold for pennies, NRG has signed new PPAs with Hawaiian Electric. NRG is putting SUNEQ projects to work. Good news for NYLD and its ROFO.

https://www.hawaiianelectric.com/nrg-and-hawaiian-electric-reach-new-power-purchase-agreements-to-revive-major-solar-projects-on-oahu#.WJFHb5bYhcs.linkedin

Share this post


Link to post
Share on other sites

Travis came unglued. LOL. They are losing a residential business, which supposedly is going to make SunPower rich according to Travis. NRG Energy is going big on commercial and utility scale.

https://www.fool.com/investing/2017/02/21/how-a-major-utility-fell-on-its-face-in-renewable.aspx?yptr=yahoo

Share this post


Link to post
Share on other sites
2 hours ago, heliostat said:

Can you share current thinking based on your portfolio allocation heavy PEGI  VS NRG/NYLD , what tips the balance ?

This percentage is not a reflection of investment allocation logic. Accounts available to me and how they break

Share this post


Link to post
Share on other sites

NYLD down today on high volume at the end of trading.. down AH as well but only about 2000 shares traded.  Reporting in the morning.  I am considering an entry at some point.  Anyone looking at NYLD presently?  I did not see any news that would explain the drop, perhaps just nervous investors? 

Share this post


Link to post
Share on other sites

Well maybe someone knew something.   loss of 3 cents per share vs estimate 34.   218 vs 264 million  rev.  

Share this post


Link to post
Share on other sites

NYLD reported in line; they gave all the warnings,

The stock has hardly moved from the March 27th, as a reaction to it.  Rest of wind is on a table they have another 300MW of solar coming from Hawaii and Texas in early 2018, $700M in liquidity, and they cost have of NEP.  Yes, not the same dividend level but second best yieldco.

Share this post


Link to post
Share on other sites

I can see NYLD be at about 5 to 5.5% yield or $19.60 $21.50 range. They are doing very well and need to buy best assets from NRG. They are also looking for additional strategic partners as well? Interesting. 

Share this post


Link to post
Share on other sites
6 hours ago, odyd said:

I can see NYLD be at about 5 to 5.5% yield or $19.60 $21.50 range. They are doing very well and need to buy best assets from NRG. They are also looking for additional strategic partners as well? Interesting. 

Thank you Robert for providing this timely information. Right to the point.  

Share this post


Link to post
Share on other sites

Is the recent NYLD drop just about market reaction to Q1 results, although seemed in line  or anything else? Have looked but cant find anything obvious? Any info? Any NRG issues?

The sensitivity of tNYLD portfolio returns in the earnings call transcript to wind/curtailment was interesting moving from P25 to P 75 leads to +/- $5m and from memory an average 5% fluctuation in either direction can trigger this, so they need one quarter of +5% to counterbalance the Q1 underperformance , although interestingly the CEO/CFO (forget which) did say annual guidance on track with some potential upside which sounds overall positive. Robert I'm wondering about your take on NRG the parent itself , is it basically coming out of trouble currently?  Thanks Robert for the reminder re NEP record date , rebalanced from PEGI to NEP recently.   Wondering how market will go for PEGI Q1 /Dev2.0 on Tuesday, drifting at the moment.

 

Share this post


Link to post
Share on other sites

If you look at the 10-Q you will see the lack of pre-acquisition of $12M from newly acquired assets.  In 10-Q NYLD actually made $10. I suppose the money were made for the parent. I think the parent is a bit of a mess, not a high flyer like NextEra. However, yieldco, as it stands today, has more liquidity than NEP. I think those yieldcos trade in tandem with their sponsors, so hard sell on NRG caused an impact on NYLD. I hope this is not a lasting condition.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Donate

    Please donate to support this community. We appreciate all donations!

    Donate Sidebar by DevFuse
  • Upcoming Events

    No upcoming events found
  • Forum Statistics

    • Total Topics
      32
    • Total Posts
      91,601
  • Who's Online (See full list)



×
×
  • Create New...