From Barron's, September 30:
Hedge fund founder Charles Lemonides is making a bet on an industry most investors wouldn’t touch today: offshore wind.
Under President Donald Trump, the outlook for almost every kind of renewable energy is bleak, but offshore wind is in the worst shape of all. Trump calls the industry a scam and wants it stopped in its tracks. His administration has revoked permits for projects, pulled back money for port upgrades, and stopped new leasing and permitting. Officials have even halted projects that were in the middle of construction.
Most investors abandoned the offshore wind industry when Trump was elected, and have stayed away since. But Lemonides, the chief investment officer and founder of the New York hedge fund ValueWorks, sees a buying opportunity.
While several companies have invested in offshore wind projects, including European energy company Equinor and the investment firm BlackRock, the only real pure-play stock in the industry is Orsted, a Danish firm that develops wind projects around the world. Lemonides has been buying Orsted shares, and plans to invest in a rights offering where the company is selling even more equity to existing shareholders.
Orsted stock trading in Denmark is down 64% this year.
“We try to buy growth stocks at value prices,” he said in an interview. “Orsted used to be perceived as a great growth stock, and I think it will be perceived that way again.”
ValueWorks owns about $10 million worth of the stock, a stake Lemonides began amassing in July. His bullish case is based largely on the value of Orsted’s non-U. S. assets. As of last year, the company was working on more than twice as many projects outside the U.S. as it had in the U.S. Even if Lemonides values the U.S. assets at zero, the overseas assets are worth much more than the entire value of the company today, he said.
The headlines about offshore wind may be scary, but “you typically get stuff cheap when that happens,” he said.
Indeed, Orsted’s stock chart shows signs of panic selling at several moments this year. In late August, Orsted shares plunged after the Trump administration suddenly ordered construction to stop on Revolution Wind, an offshore project near Rhode Island that Orsted owns along with a unit of BlackRock. The project was about 80% complete....
....MUCH MORE
Not just hedge funds:
Private Equity - "Ørsted in talks to sell 50% stake in flagship U.K. offshore wind project to Apollo - FT"
Oil & Gas - Nordic Solidarity: "Equinor to Subscribe for Orsted Shares Worth Up to $939 Million in Rights Issue"
