Wednesday, February 4, 2015

A novice analysis on HASI

Hello Guys/Gals,

I have been getting a lot of comments/emails about CORR and HASI. I wrote a novice analysis on Corr earlier in my blog and Brad Thomas recently wrote an interesting piece on Seeking Alpha HERE.

I just wanted to take a second and talk about my second REIT; Hannon Armstrong Sustainable Infrastructure (HASI). HASI is not Solyndra or a solar panel manufacturer. HASI is a reit that "makes debt and equity investments in profitable sustainable infrastructure projects that increase energy efficiency, provide cleaner energy or make more efficient use of natural resources." In other words; HASI is a bank. But for some reason many investors think HASI is an mreit (which it's not). HASI is more of a specialty Reit.

Their money making formula is as follows:

Buy land + put in renewable resources + sell the energy to places/people = profit.

 Lets look at their strategy. The attached pictures were taken from HASI presentation at the Wells Fargo Energy symposium.

Is This High-Yield Green Energy Stock Flying Under The Radar?

Is This High-Yield Green Energy Stock Flying Under The Radar?

Is This High-Yield Green Energy Stock Flying Under The Radar?

Is This High-Yield Green Energy Stock Flying Under The Radar?

Is This High-Yield Green Energy Stock Flying Under The Radar?





Conclusion

TBDI, you just gave me a bunch of data but what does any of this mean? I'm glad you asked random reader.

Pro: 
1) high risk high reward.
2) Management has 30+ years of running renewable energy companies.
3) Management has clear goals and means of achieving their goals.
4) Dividend friendly management.
5) Relatively increasing EPS except for Q1 2014.

Con:
1) HASI is a relatively new company with a sustainable plan...but it is very speculative.
2) Renewable energy stocks suffer from shorts and lack long term investors.
3) Low oil prices will decrease HASI market price.
4) High leverage. 2:1 ratio. If management fails to meet expectations, dividends WILL be cut. 
5) Suffers from interest hike fears. Investors treat HASI as an mreit.

I currently 41 shares of HASI or 2% of my portfolio. I will eventually own 50 shares total.

If you are interested in owning or shorting HASI, the fair market value is $13.60; low $13.50; and high $15.00.

Disclaimer: I am not a financial broker, planner, lawyer, adviser, etc. LONG HASI.

Below is a copy of HASI revenue. I'm still learning excel. 

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