Climateer Investing: A Little Love for Pelosi, Pickens: "Think Equity’s Woodburn Raises Price Target on Clean Energy Fuels " (CLNE)

Tuesday, August 11, 2009

A Little Love for Pelosi, Pickens: "Think Equity’s Woodburn Raises Price Target on Clean Energy Fuels " (CLNE)

I didn't bring it up in yesterday's "Clean-Energy Summit: You Want Clean Energy? Shale Gas." but something seemed unsaid about the hubbub around natural gas. My initial query is "Who owns what?". Here's a politically connected deal via SmallCapPulse:

Think Equity’s David Woodburn weighed in on Clean Energy Fuels (Nasdaq:CLNE) this morning, stating that “We continue to recommend CLNE shares as cleaner emissions, lower fuel cost than diesel and government incentives…should continue to drive growth…” Woodburn rates the stock at BUY and increased his price target to $12.
Key Takeaways

· Q2 volumes and gross margin increased but upside was offset by non-operational expense

· Modeling profitability in Q4 driven by new contracts and organic growth, not an economic recovery

· Recent $73M raise in secondary and $5.6M in Q2 cashflow should drive growth through the end of 2010

· 25 stations under construction or being upgraded

· Subsidies for 96 natural gas trucks were recently approved through the Port of Long Beach and between 300 and 500 natural gas truck grants likely to be announced in September through the South Coast Air Quality Management District

· Updating volume estimates and keeping margin estimates the same going forward – FY09 EPS increased to ($0.22) from ($0.25) and FY10 estimate increases to $0.19 from $0.11

· Maintaining BUY rating and increasing price target to $12

From yesterday's post:

...Sen. Reid opened his remarks by saying, “I’ve been converted. I now belong to the Pickens church,” in reference to the plan pitched by Oklahoma oilman T. Boone Pickens to ramp up the role of natural gas (and wind power) in U.S. electricity generation. Natural gas has roughly half the carbon emissions of coal when used to generate electricity.
That echoes remarks House speaker Nancy Pelosi last year, when she referred to natural gas—which is, after all, a fossil fuel—as clean energy and an “alternative” to fossil fuels....

From last year's series on CLNE:
T. Boone Pickens: Greenwashing and Rentseeking (CLNE)

Mr. Pickens' Clean Energy Fuels (CLNE) priced its IPO at $12.00 in May 2007.
From the New York Post:
...Which brings us to Pelosi's 2007 financial disclosure form. Schedule III lists "Assets and 'Unearned Income' " of $100,001 to $250,000 from Clean Energy Fuels Corp. - Public Common Stock. Clean Energy Fuels Corp. (CLNE) is a natural-gas provider founded by T. Boone Pickens, the former oilman turned wind-power evangelist....
...The wind venture, as Pickens himself admits, depends on permanent federal subsidies.
Pickens is banking on 'em. And Pelosi is banking on him. She bought between $50,000 and $100,000 worth of stock in Pickens' CLNE Corp. in May 2007 on the day of the initial public offering:

"She, and other investors, stand to gain a substantial return on their investment if gasoline prices stay high, and municipal, state and even the federal governments start using natural gas as their primary fuel source," reported dontgomovement.com.

CLNE also happens to be the sponsor of Proposition 10, a ballot initiative in Pelosi's home state of California to dole out $10 billion in state and federal funds for renewable-energy incentives - namely, natural gas and wind.

Follow the money. Or, to put it in economist's terms, as energy analyst Kenneth Medlock III did in The Dallas Morning News about the Pickens multibillion-dollar wind-farm investment: "A lot of what he's trying to do is add value to a stranded asset . . . he's obviously got millions of dollars on the line."...
And that, boys and girls, is how it's done in the big leagues.