Nordex AG, a German company that develops and manufactures wind turbines and wind energy systems, was downgraded by analysts from WestLB and UniCredit causing its stock price recently to hit a new fifty-two week low of 17.82 Euros on the Frankfurt stock exchange. Some of the reasons for the downgrades given were "high start-up costs in its U.S. business" and lack of confidence in the company's ability to handle its strong growth while also improving its EBIT (earnings before interest and taxes) margin to the 9% to 12% percent target.
Nordex AG (FRA:NDX) operates globally and has sold wind turbines in thirty-four countries. Nordex plans to invest approximately $100 million in the U.S. in the next few years to produce wind turbines and rotor blades. In 2008 Nordex entered the Polish market and signed contracts for new orders with Turkey to supply thirty-six turbines, as well as with Italy which has very positive growth market projections.
In March 2008 Nordex signed a large contract worth as much as 280 million Euros with a major customer, Falck Renewables, London to install wind turbines across Europe between 2009 and 2011. Nordex was one of the first companies to provide China with wind turbines and wind energy systems and is establishing a strong foothold in that country's lucrative and fast growing market.
For the first quarter of 2008, sales for Nordex AG were up 32% to 199 million Euros from 151 million Euros the prior year. Net income for the first quarter 2008 rose 21% to 5.7 million Euros from 4.7 million Euros in 2007. Sales for the full year 2007 were up 46% to 747.5 million Euros from 513.6 million Euros in 2006. Net income (excluding a tax reimbursement of 8.9 million Euros) increased 210% to 39 million Euros from 12.7 million Euros the previous year.
The recent downgrades to Nordex AG are due to temporary conditions that do not affect the long term outlook and economics of Nordex AG's business. The Company's stock closed on July 17th at 18.07 Euros, just above its fifty-two week low and down 54% from its fifty-two week high. This presents a unique opportunity to buy the shares of a world class leader in the fast growing wind energy industry at a bargain price. Nordex's stock should turbo charge your portfolio.
References:
http://www.nordex-online.com/index.php?id=53&L=2&tx_ttnews[tt_news]=499&tx_ttnews[backPid]=45&cHash=1a93ba2ead
Company First Quarter 2008 Press Release
http://www.nordex-online.com/index.php?id=271&L=2
Company 2007 Annual Report
User comments