John McIlveen, Jacob & Company Securities, Inc. (08/30/10)

"Given the capital constraints of the current market, we looked at the as is values for four geothermals. As is means what can the company accomplish with cash on hand, thereby not going to market for new equity. We further included only those projects where production well drilling has begun. The following companies are considered: Ram Power, Magma Energy, Nevada Geothermal and US Geothermal.

Ram has three projects where production well drilling has begun and more than enough cash to complete them. The peak EBITDA year is 2013 when all three are online and that drives a per share price of $6.32 for a three-year CAGR of 42%.

. . .All these companies have worthwhile project pipelines and are constrained only by cash. Ram is an exception as it still has US$136.5M remaining in 2013 to advance its other projects and, as such, may warrant a higher multiple if growth exceeds 25%. Ram starts our scenario with cash of US$92M on June 30 2010, spends US$60M on San Jacinto, Geysers and Orita and gets back US$105M in ITC grants on Geysers and Orita. This makes Ram our top pick within the geothermals."

At less than Cdn $2.20, I am backing up the small truck!