Wednesday, October 2, 2013

Seeking Alpha: Can PowerSecure's Odd Mix Generate Real Cash Flow?

Just on the surface level, PowerSecure (POWR) looks like it should be in some businesses with attractive long-term prospects. The company's distributed generation operations address the dual realities that not as many commercial/industrial sites have backup power as you might imagine and that there are savings to be gained from using on-site generation for peak shaving/demand response. Elsewhere, LED lighting and energy efficiency are almost perennial hot topics, and though utility infrastructure is not necessarily a growth market on its own, transmission & distribution (T&D) work has been lagging long-term demand and PowerSecure is building off of a low base.

Clearly the Street is feeling more cheerful about the name. The shares are up more than 170% over the past year and roughly 300% from the mid-2012 lows, and a small cadre of well-known institutions own worthwhile chunks of the stock (though some of that is for ETFs). While I'm actually more bullish with my numbers than management's own presentation, I'm not quite as bullish as the sell-side at this point - I do believe these shares remain undervalued, but a price target in the $20s might be a bit much right now.

Please read the full article here:
Can PowerSecure's Odd Mix Generate Real Cash Flow?

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