To OTC Journal Members:
 
 

Renewable Energy With a Twist: HRTE is a Double-Barreled Growth Story

Investing in renewable energy technologies can be a funny dance sometimes. The stocks you hear the most about and the industries garnering the most attention - like solar power has lately - aren't always the best opportunities. Wind energy, for instance, is growing leaps and bound again, and is poised to dole out some of the best growth for the foreseeable future. Yet, nobody is putting that fact into the spotlight.

At the same time, finding a great wind power stock is no easy task. There are very few pure wind plays, and even fewer actual ground floor opportunities.

Well, good news - we've identified a small stock that is not only a direct way to tap into wind power's growing revenue stream, but this company is also making good (i.e. revenue-bearing) use of all the land that wind farms require... something other wind farm operators have simply missed the boat on.

Best of all though, this young company is just starting to get investors' attention. Translation: You can get in before the rest the market starts to plow in, but you better hurry.

The company is called Here Enterprises (HRTE), and it's on the verge of fostering the next evolution of wind farms. Before making any decision about investing in the stock, however, we suggest investing a few minutes of time to really absorb this incredible story.
 

Right Place, Right Time, Right Technology

If there was ever a time to scoop up some wind energy exposure, it's now. The revival of its growth has been nothing short of amazing since 2010. In fact, the installation pace of wind power systems grew by 32% last year, fueled by nice incentives and big money flowing into the arena. How much money? About $150 billion was poured into renewable energy sources globally in 2009, which was more than was put into traditional fossil fuel power generation.

The trend hasn't backed down either. Though 2010's full-year numbers still aren't in, we do know that the total global wind power generation capacity in the United States increased by 9% in the first half of 2010. Indeed, about 40% of all new electricity generation capacity in the United States is wind-based. Yet, it still only makes up a fraction of our total power production.

It's not just a 'right time' scenario either. Here Enterprises is also in the 'right place'... literally.

The inaugural wind farm project the company announced in mid-December will be located in Floresville, Texas - the state where the six largest U.S. wind farms can be found. The state's usage of wind power has been growing like crazy too. In 2007, 2.7% of the state's electricity needs were met by wind power. By 2009, that number grew to 4.9%. 2010's final tally will be even bigger.

What's so great about Texas? All joking aside, Texas has most of the right kind of wind.

Ideal wind farm conditions are consistent breezes of 10 mph or more. Though the upper Midwest is generally known for that kind of environment, Texas has more than its fair share.

In other words, if you're going to build a wind farm, Texas is the place to do it.

Better still, Here Enterprises is poised to enjoy far more flexibility with varying winds speeds than most established wind farms enjoy.

It's called variable pitch technology, or VPT. Earlier wind turbines don't have it, but recent advances in wind-blade airflow technology essentially make newer windmills able to operate efficiently at a variety of wind speeds.

While normal wind turbines can effectively operate in winds as low as 10 mph, when wind speeds reach 30 mph or more, there's actually a decrease in power due to tail-furling or a blade design that slows the blade speed when pressed too hard. Variable pitch technologies, however, allow Here Enterprises' turbines to increase power output up to wind speeds of 56 mph.
 

Maximum Use of Wind Farm Real Estate

For those who've ever seen a wind farm in person, it's pretty incredible to see these giant moving structures. Generally speaking, each farm is made up of dozens of towers reaching 200 feet high (or more), each holding up three-bladed turbines; the blades themselves can be 100 feet long, if not longer.

The other interesting aspect - and downside - of wind farms becomes obvious almost immediately though... these turbines take up a lot of land, with some sites allocating a few acres of space to just one tower. By and large, that land around is used for crops and grazing, which is fine. It's not always what's needed or wanted in a locale though.

By that same token, wide open spaces that offer enough wind and real estate to establish a wind farm may not be all that close to power transmission lines, upping the total cost of wind energy.

Here Enterprises recognizes that the mostly-unused space on wind farms can actually be utilized as revenue-bearing real estate, and is planning to capitalize on it.

Take the Floresville, Texas wind farm project as an example. It didn't start out with electricity generation as the intent. The company actually owns and operates a motocross racing facility called Cycle Ranch on the 108 acre property. It's one of the nation's finest motorcycle and BMX venues, but like most of them, there's a ton of unused space around and between the tracks... enough to also build several wind turbines on the grounds.

The idea is also the model for future wind farm sites where agricultural needs aren't the optimal use. Here Enterprises sees dual usage opportunities including:

• WindPlexes - In the same vein as Cycle Ranch, the real estate surrounding wind farms can be used for everything from other racing parks to water parks to golf courses to retail, and more.
• Windustrial Parks - If the cost of connecting industrial parks and wind power sources is cost prohibitive, the obvious and cost-effective choice is to build the two on the same site.
• Eco-Parks - Camping and nature trails set in the lush green spaces that typically surround a wind farm.

Why Now

While it's not a new company, for all intents and purposes, the stock didn't start trading until Here Enterprises cemented the Floresville project in place back on December 15^th. Immediately we saw trade volume swell, and it's only grown since then.

That being said, this is only the beginning.

See, getting the first wind project under a company's belt is the toughest one. Future projects tend to come a little easier after that, and the market tends to be a little more receptive - and bullish - as progress is made and news is released.

Point being, HRTE is literally at its ground floor. The more updates that are posted and the more projects that are announced, the more the stock should get bid up; it will take very little demand to send this micro cap stock higher in a hurry as more progress adds layers of confidence.

Another reason investors will want to act now is simply that a relatively small investment today can give you a significant piece of the company. A mere $1000 can get you about 2% of the total equity, and give you significant exposure to wind power revenue in the heart belt of America's wind industry. In the meantime, you also own a piece of a very successful motocross track.

And third, Here Enterprises is attractive not only as a wind play (of which there are few), but also because the business plan is double-barreled. Most other wind farms take up real estate without maximizing its potential. This company understands how multiple revenue streams are possible with the same amount of space.

Bottom line - this seems to be one of those 'if only' scenarios, meaning HRTE has the potential to cause those investors who didn't step in now to look back a couple of years from now and say 'if only I had invested then'. Don't be one of those victims - become a major owner in a fast-growing small company before the word really starts to spread.