From the Dow Jones empire:
Wind-power stocks can be as fickle as the wind itself.
Shares of Otter Tail Corp., a diversified company with businesses in food ingredient processing, plastics, and wind tower manufacturing, dropped sharply Tuesday, losing 20% of their value after the company’s earnings report showed that the wind sector isn’t growing as fast as investors would like.
Since wind has become the latest new new thing among alternative energy investors and others such as oilman T. Boone Pickens, Otter Tail, among others, had risen dramatically in the last several months in anticipation of strong sales. However, despite an increase in revenue, net income fell to 11 cents a share for the quarter, from 53 cents a year earlier. The company also lowered expectations for coming quarters, for the second time this year....
... “Wind is where the growth is supposed to come from and it’s what people are paying the premium multiple for,” he says. “What you’ve found out is that there are growing pains here and the premium multiple should be re-evaluated.”
