# Polaris Infrastructure Inc (PIF.TO)



## kelaa (Apr 5, 2016)

Polaris Infrastructure Inc is a geothermal development company with one plant and one development concession down in Nicaragura. It was born out of a restructuring of Ram Power. I guess the story was that Ram overspent on the construction and drilling of the $400 million US project, and the power output was less than expected at ~50 MW out of a contracted 72 MW. The previous equity owners were wiped out. The company is drilling new wells and working on existing wells to try to bring up the generation up to contracted capacity. 

As of early August, the FCF was about 70 cents US, on which they were paying 40 cents US in dividends. Bring the generation up to capacity would be worth something like another $1.20 US FCF. This was public knowledge, and the stock was quiet from April to late July at around $8 CAD. By the August 9th Q2 reporting time, the stock has crept up to $9 CAD. Then inexplicably from August 15th onwards, the stock has gone straight up and is now at $13.50. The company finally has a press release today after market close saying a new well is performing and currently adding 10 MW (about twice the expected amount, and might almost double FCF). To me it sure looks like a situation where people were trading on insider knowledge. So much for a fair marketplace. Maybe that's one of the perils of smaller cap companies.


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## hollyhunter (Mar 10, 2016)

From the relationship between price and moving averages; we can see that: This stock is BULLISH in short-term; and BULLISH in mid-long term. Looking for breakout at 14.68 with a short term target of 17.15.


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## hollyhunter (Mar 10, 2016)

The stock is doing pretty good job recently and is poised to move higher. Next watch stop: 16.23.


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## hollyhunter (Mar 10, 2016)

It has broken the 16.23 resistance and heading for 17.00. Target increased to 19.86.


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## kelaa (Apr 5, 2016)

Any skin in the game, hollyhunter? Or is this purely a technical exercise?

I exited my position at $16. That was my estimate of the value at this point in time. I do see $20-23 as plausible for fair valuations in the intermediate term once the existing plant is up to capacity. If they can secure World Bank funding for a second project, the value can be even higher still. 

But I wanted to take my profit and rotate into more REITs. Everytime I heard any earthquake mentioned in the news, my heart skipped a beat waiting to hear if its in Nicaragua or the vicinity. And there is always the jurisdictional risk (e.g. Alberta coal PPA's).

And off course I'm pissed off at the sharp price movement prior to the last public news announcement.


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