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The stock market wiped close to EUR 1 billion, almost 20%, off the combined share prices of the listed wind companies over the past quarter. For once, broad price movement in the stock market cannot be blamed. It was up 4% in the same period. All four wind companies were hit, but it was the sharp decline in the stock prices of Vestas and Gamesa -- both down over 19% -- which struck home. Stock purchase recommendations from equity analysts reflected wind's fall from favour, with five less "buy" recommendations than in the previous quarter. In aggregate, "buys" for wind stocks are down from 37% to 29% of total recommendations since the last Windicator.

The catalyst that sent Vestas's stock down was its third quarter results and lower than expected profit forecast for 2005. The immediate drop in share price after the announcement was not unexpected. The surprise came once the price bottomed out and nobody took advantage of the low rates. Tired of the tumult caused by repeated Vestas' profit warnings, it seems investors are waiting to see what happens with the company, particularly when under new management. The very volatility of share prices is also a deterrent to some institutional investors, particularly smaller socially responsible funds where Vestas represents a sizeable portion of their portfolio. Sharp movements in stock price have a greater impact on such funds than on larger diversified funds. It could keep away the kind of long term investors that Vestas needs.

The entrance of Siemens as a wind turbine manufacturer through its purchase of Bonus is expected to substantially influence the market. The consensus view is that the stakes are being raised for all players and that the purchase will hasten further consolidation. For takeover targets, this might mean a potential premium is to be had, as NEG Micon shareholders enjoyed, but it also means competition between the companies will intensify, placing profit margins under greater pressure. Again, investors are waiting to see how things develop before wading back in. Full year 2004 results from the companies, released during the start of 2005, will be the next occasion for reflection.