David White

Total Rating:
+1 / -1

431 Comments

    • Thu Aug 21st 06:48 AM | Rating: 0 0
      Commented on:
      Solar Stocks After Earnings: Suntech Up, ReneSola Down
      SOL did go up yesterday. Tuesday, the day SOL reported, was a down day for the market. In fact the market started out down considerably. Growth stocks tend, especially recent IPOs, tend to go down fairly dramatically in a down market. That day the overall market news was bad. Since then Credit Suisse has kept its outperform rating on SOL, and it has raised its one year target price to $29 from $25. Piper Jaffray has kept its buy rating, and it has reiterated its one year target price on SOL of $35. There are only 4 analysts covering SOL. This means the new average target price is $29.50. I have not seen comments from the other analysts yet. However, they may yet raise their estimates. SOL had no bad news, only good news. Its margins were in line with comparable companies in its industry. It has secured its polysilicone for this year at reasonable rates already. It is not like TSL hemming and hawing about what the margins may be for the rest of the year. Oh yeah, it more than tripled it earnings from the year ago quarter ($.12 to $.38). It also beat estimates by a good margin (not as much as STP). It guided a good amount higher on revenue for the rest of the year (13% on average). This is likely to lead to a very near term pop of 13% or more in the stock price, especially with more good earnings from SOLF coming up next week. SOL's EPS were $.38. STP's EPS were $.38 (GAAP). SOL's stock price closed at $19.11 Wednesday (PE = 18.49). STP's stock price closed at $41.75 (PE = 31.78). Analysts' average ratings are SOL = 1.8, and STP = 1.8 (a tie). The growth through 2009 is also predicted to be about the same for the two. It looks to me like SOL is the better bargain at the moment. STP is definitely more followed though. In this kind of market, I think it makes sense to pay a fair amount of attention to value, not just the market "emotions" about a particular stock. We keep getting downturns. When the next one hits, which stock do you think will go down the biggest percentage? I think SOL looks pretty strong with its PE after Q3 earnings going down to approx. 12.7. I don't think STP will be anywhere near this. What makes it better. You can lose more money with it?
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    • Wed Aug 20th 20:00 PM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      PJ analyst Jesse Pichel reiterated his buy rating on SOL, and he raised his one year target price to $35. He also explained why he thinks SOL if much better off than other companies such as TSL in terms of margins this year. Specifically SOL already has contracts for its polysilicone stock at reasonable prices. SOL margins should not deteriorate this year. I don't think anyone knows exactly how the long term future will play out in solar. However, it is clear that solar energy is a growing field, and it will be with us for some time. SOL looks to be a well run company. It was listed in a CAPS article today as one of 7 energy stocks set to take off (i.e. one of the best buys in energy). Some of the other stocks listed were PBR, RIG, and CHK. That's pretty heady company for a recent Chinese IPO.
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    • Tue Aug 19th 23:50 PM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      supershort: Your comment about SOL going down due to the conference call may be a miscalculation on your part. I am not sure it had anything to do with the conference call. The margins seem more or less in line with other manufacturer's. To me it seems more likely the stock was just down today in sympathy with a recently downtrending market. It has been my experience that high growth stocks tend to move in the direction of the market trends, regardless of their fundamentals. This speaks particularly well for LDK, which had great results. LDK also should have a better margins soon with its polysilicone plants due to start producing significant amounts of polysilicone in 2009.
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    • Tue Aug 19th 23:39 PM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      supershort: I am really more a fan of SOL than STP. I just think STP earnings should be good this quarter. Also STP has been a more "followed" stock.

      I am also worried about future margins. However, CSIQ and LDK have already started to make UMG solar along with standard hi-purity polysilicone solar. I expect most of the other hi-purity polysilicone solar makers will move to some combination of hi-purity and UMG manufacturing. This should help margins considerably in the future. The low-purity polysilicone needed for UMG is only about one tenth the cost of the hi-purity polysilicone.

      Further after the conference call Credit Suisse left their Outperform rating unchanged; and they raised their one year target price on SOL from $25 to $29. I have seen no lowering of ratings or target prices yet. I wouldn't be too quick to short this stock. Usually there is a good reason a stock can garner an average 1.8 analyst rating when similar stocks are less well rated. To me it just looks like a well run company with good potential. We will have to see how the solar market shakes out. If there is a fairly quick shift to UMG solar, the possible decreases in price may cause a faster ramp up in demand. The CIGS solar companies should also be a bigger factor within another year or two. I would think FSLR would be a much better short than SOL. I could always be wrong.
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    • Tue Aug 19th 09:44 AM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      The current average 1 yr. target price estimate on SOL is $28.50. The revenue guidance was for and increase of approx. 13% this year. In theory this seems likely to lead to an approx. 13% increase in 1 yr. target price. This would mean a 1 yr. target price of approx. $32. One might argue that this should translate into a relatively immediate $3.50 pop in the stock price. We'll have to see what the analysts say in the next day or two.
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    • Tue Aug 19th 09:17 AM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      I note the EPS for all of 2007 for SOL were $.86. Therefore a ballpark estimate for Q3 of $.15 is more likely a low figure than a high figure.
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    • Tue Aug 19th 08:55 AM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      SOL almost more than tripled earnings from $.12 in the year ago quarter to $.38 this quarter. I don't have the data for Q3 of last year. Thus I am making a ballpark estimate of $.15 for Q3 of 2007. If you add this to the results since then: Q4 = .34, Q1 2008 = .28, and this result Q2 2008 = .38, the total EPS for the TTM period is .15 + .34 + .28 + .38 = $1.15. The current PE for SOL based on this calculation is $17/$1.15 = 14.78. This is a relatively low PE for a quickly growing stock. It has room to move up. If you estimated a conservative PE to be 20, the stock price could move fairly quickly to $23. In a drastically falling market, this will naturally not happen soon. We will have to see where the market goes. This is still a good result.
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    • Tue Aug 19th 08:43 AM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      STP is supposed to release results tomorrow. This is a more followed company. It also should have good results. If the market starts to go back up again. Both of these companies prices should rise. SOLF is due to report next week. SOLF should also beat estimates. I am hoping we don't get a huge overall market fall in the meantime. If the market cooperates, SOL seems likely to head upward.
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    • Tue Aug 19th 08:35 AM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      Today SOL reported a beat and a guide higher. They reported EPS of $.38 ($.32 had been forecast). They also raised guidance for the year. Revenue moved to $640-$670M from $570-$590M. They also raised the amount of MW they will produce. They are now estimating 340-350MWs for 2008. This is a good result, but not the great result of some others such as LDK. Still this company seems to be well run. The analysts like it (Avg. rating of 1.8). The gross margins were a respectable 24.7%. This stock currently trades at a premium PE. However, this is an illusion. It is a recent IPO. After this last result, I think one might conservatively estimate full year EPS for SOL at approximately $1.40. At the current price of about $17 this morning, the PE for 2008 would be approx. 12. The FPE (2009 earnings) is approximately 8. This is a low multiple for a quickly growing stock that is well thought of. This stock likely has room to move up if the analysts don't ding it for some reason. We will have to wait to see after the company's conference call.
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    • Mon Aug 18th 09:44 AM | Rating: 0 0
      Commented on:
      With Help from California, Solar Gets Fired Up
      SOL reports earnings tomorrow. It is in the same space as LDK. It should do extremely well. I am looking for a good to great beat on EPS estimates. The outlook should be favorable too. The recent California contract (PG&E) with SPWR should provide more reason to expect great things from SOL.
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    • Fri Aug 15th 09:56 AM | Rating: 0 0
      Commented on:
      Solar and Cash: The Big Boys Have an Answer - Do You?
      SOL reports next Tuesday, Aug. 19. It should have great earnings. It is in the same market segment as LDK, and it gives all indications taht it is a well run company. It seems likely to pop, expecially with the latest news from PG&E and SPWR. The analysts already like it. They probably won't upgrade their positions much. It is already a 1.8. However, 1 year target prices could increase. The average current target is $28.50. A Thursday Motley Fool article also listed SOL as one of the stocks it thought likely to double in the next year. It's probably a good bet. LDK announced some UMG production. SOL may follow suit. If not this quarter, perhaps next.
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    • Fri Aug 15th 09:34 AM | Rating: 0 0
      Commented on:
      The Commodity Comeback: Sooner Than You Think
      I should mention that I think there is likely to be long term upward pressure on most if not all commodities for the foreseeable future. The fastest growing economies will start to use more of all of them. This will put upward pressure on the prices of all of them. Fortunately for the US, we are relatively food rich. I hope that situation doesn't change.
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    • Fri Aug 15th 09:31 AM | Rating: 0 0
      Commented on:
      The Commodity Comeback: Sooner Than You Think
      The dollar's longer term recovery will likely be predicated on the US's ability to stem its oil importation trade deficit. T.Boone Pickens estimated that to be about $700 Billion in 2008. The US economy obviously cannot afford to have that large an outflow of monies from its economy. The US has to conserve. It has to use alternate energy sources. It has to produce more oil itself. If the US can do a good mix of these things in the relatively near future the US dollars rise could be sustainable. If it cannot, the dollar will rise. Then exports will lessen due to higher costs. Then the US dollar will fall again. Perhaps some other bad event could also happen to make the dollar fall again. I think we, the US, should try very hard to make significant near term headway in all three of the areas I mentioned above.
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    • Fri Aug 15th 08:55 AM | Rating: 0 0
      Commented on:
      Oil Will Only Fall So Far
      The markets are not insane. The overriding trend in commodities is down at the moment. This is quite simply because the US dollar has stabilized; and it is now going up. All of the people who were hedging the dollar with commodities futures are now trying to get out of their commodities futures positions. As most people know, you sell into rallies in this case. The Georgian situation would provide an excellent opportunity for many hedgers to exit their commodities trades. The overall effect of this mass exodus is a temporary spike downward in demand for the commodities. Eventually this sell off of hedge positions will wear itself out. Then you should see commodities prices start to recover. Of course, I am not sure how quickly this will occur. It may be that some hedgers will short futures contracts in the attempt to hedge the dollar to the upside, at least temporarily. If this occurs, it will further deepen the decline in commodities prices by providing a further spike downward in demand. Good luck with your trading, but try to pay attention to "all" of the markets, not just the one you are following. You often need the big picture to make sense of the smaller one.
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    • Fri Aug 15th 08:42 AM | Rating: 0 0
      Commented on:
      Friday Outlook: Commodities, Global Markets
      How much of a run do you think we are likely to get in the dollar? I think this will be dependent on how much we spend on oil imports. Still the news from PG&E and SPWR yesterday was very encouraging. Hopefully the Congress will maintain the solar tax credits at least until the solar sales really take off in the US.

      In your opinion, what is the best way to play the likely further rise in the dollar (other than the Forex)? There has been bad economic news from Japan and several European countries lately. It does seem likely the dollar will rise against those currencies for the near future, especially if we can spend less on imported oil. To really see how much we are spending on imported oil, all you have to do is look at Dubai. That money is coming from somewhere.

      Do you think the FOREX may be a good idea for an area to make money as the US dollar likely rises? Or are the ETF's a much better idea for the non-Forex experts?
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