Property, Wind and Packaging today.

A few updates on stocks I have mentioned in the past. Firstly a brief update from Picton Property (PCTN) the commercial property investment company. They have announced some successful planning outcomes for the development of a
15,000 square foot food store for Aldi and 70 residential units. There is also a further 4.4 acres now going to planning for more residential units. So should help to provide an uplift to the NAV and the earnings which should further bolster the earnings cover and may even prompt an increase as some point.

Next up was a results announcement from Renewable Energy Generation (WIND) the AIM listed renewable energy group, whose main business is the development, construction and operation of wind farms and generating power from refined used cooking oil. The numbers themselves look a bit mixed and are quite hard to interpret,  and the shares are therefore quite hard to value, but it was encouraging to see a proposed increase in the final dividend which brings the full year total to 2.2 pence - a 10% increase on the year.

They gave an interesting update on their outlook for the Company an extract from which was as follows:

Our objective for 2020 is to own and operate a sizeable fleet of diversified renewable energy assets funded with a conservative ratio of debt to equity and providing a predictable yield for investors superior to that available from funds simply acquiring operating assets.

Our strategy to achieve this in a capital-constrained environment is to build out our substantial pipeline using an optimal mix of debt and equity.  Recycling capital from selected projects to release cash and value gains allows this continued financing of new renewable projects across the Group, with the aim of ultimately retaining projects as part of a diversified portfolio of assets providing long-term, predictable earnings with low risk.

Our partnership with BlackRock plays a role in this and following on from the two wind farms we sold to them last year they acquired our largest project Goonhilly Downs, realising for the company a profit of £9.1m along with our first solar PV project also at Goonhilly.

These asset sales illustrate the anomalies inherent in the valuation of many publicly quoted renewable energy stocks. With market value lagging demonstrated net asset and intrinsic values we remain focused on converting our ample pipeline of good projects into long duration cash flows.

Interesting that they are talking of ultimately providing a better yield than investment funds as a self managed builder / operator of these types of assets. They are not there yet though as the current 2.2 pence dividend only gives a yield of around 3.3% at the current 67 pence. So suggests some scope for future growth in the dividend from here, but I guess patience will be required and it may be a bit dull for some. See the announcement at the link above and their website from the name link for full details and a presentation they are doing today if you are interested in it.

Finally there was a Q3 IMS from Essentra (ESNT) a stock which I wrote up earlier in the year as one of my greatest hits.
Having sold out at over 900 pence, when they got expensive, I have been watching it as the year has progressed as it remains a good quality, well managed company. In today's update they talk about continuing to achieve their vision 2015 goals of mid single digits LFL revenue growth and double digits earnings growth, albeit at constant currencies. However, like many other UK firms their actual results have been held back by the strength of Sterling.

The shares in common with other mid caps and now the broader market have come back quite sharply in recent months (see chart below) and are now potentially looking more reasonable value if not an outright bargain on around 17.5x with a 2.4% yield for this year which falls to around 15x with a 2.8% yield for the next year. to December 2015. They are also due to present on 20th November at a capital markets day about the next phase of its development. I guess this could lead to some excitement either in the run up to or afterwards if they can lay out some more decent growth plans which might justify the current rating. So probably one to watch still rather than rush out an buy, but it does look oversold if you are impatient and want to take a longer term view.