Opinion: U.S. Geothermal: Egregiously Undervalued? (Alternative Energy Stocks)
Last week
U.S. Geothermal made an appearance at the
Marcum Microcap Conference in New York City. The company stood out among most of the companies appearing in Marcum’s so-called ‘energy track’ as one of the few with solid revenue and profits. U.S. Geothermal reported a net profit of $1.9 million on $28.8 million in total sales in the twelve months ending March 2014. The net profit is commendable, but what I find more interesting is the conversion of 30% of sales to operating cash flow of $11.4 million.
The ability to generate cash flow is vital for a growing company like U.S. Geothermal. Over the last three years the company has spent an average of $16.5 million annually on capital investments. The company has also been acquisitive. Most recently the company bought the Ram Geysers project in Sonoma County, California for $6.4 million in cash. Ram Geysers has five completed wells available for immediate production near 30 megawatts of total steam assuming 25% of the geothermal liquid is re-injected back into the reservoir.
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