RPG: The Geothermal Investment

Adrian Day's Global Analyst (03/01/2010)
"For investors, the problem with geothermal is that the market is bifurcated between a few very large players and several tiny companies. The largest geothermal generator is Chevron, but one wouldn’t buy that company for its geothermal. There are a dozen or more tiny geothermal outfits, some of which have current operations, but they are very thinly traded.

A much better investment is. . .Ram Power. . .[which was] taken to market in 2009, with the aim of building a geothermal company of scale.

Ram Power was put together by equally ambitious Rick Rule, who hired Hezy Ram from Ormat to run the company, with Chris Thompson, former CEO of Goldfields, as chairman. The company was formed by bringing together three small[er] companies. The team is more prepared to buy existing companies to build Ram, which now has small operations in several countries. One is likely to do very well attached to these coattails as well.

My recommendation is buy this stock, with a long-term view. Because of the likely need to raise more money, or issue stock, we are putting it in the 'Aggressive' part of our investment pyramid, but suspect patient investors will do very well."

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