Posts Tagged ‘First Solar’

Solar Power: Sunshine’s Cloudy Days

Solar Power: Sunshine’s Cloudy Days

By Mark Halper, courtesy of TIME

AP, posted in TIME Mike Ahearn, chairman of the world’s largest manufacturer of solar panels, had every reason to party in September. That’s when his company, First Solar, based in Tempe, Ariz., was picked by China to build what promises to be the world’s biggest solar-electricity plant: a Manhattan-size facility in Inner Mongolia providing 2 gigawatts of power, about twice the size of a large coal plant or average nuclear power station. But the Chinese facility will take years to build, and the party buzz subsided pretty quickly. The next month, Wall Street analysts downgraded First Solar’s stock after the company missed its third-quarter revenue target. "I think the Wall Street perspective is pretty short-term," says Ahearn.

That’s true, but it’s also true that, while photovoltaic cells that turn sunlight into electricity may play a potentially vital role in weaning the world from fossil fuels, a transition will take decades — and the business metrics surrounding the solar-power industry currently are anything but bright. After a period of rapid expansion, panel manufacturers today are reeling from a pronounced supply surplus, falling prices and stagnating sales. In 2009, industry revenue plunged by nearly 40% to about $25 billion from $40 billion the previous year, according to BankAmerica Merrill Lynch alternative-energy analyst Steven Milunovich. Solar-panel output far outstripped demand last year; manufacturers made 66% more product than they were able to sell, estimates research firm iSuppli located in El Segundo, Calif. Some analysts believe the dismal conditions will persist into 2011, setting up marginal players worldwide for failure. "A large number of manufacturers will not survive," says Paul Semenza, an analyst with research company DisplaySearch, based in San Jose, Calif.

The global glut has been building for a number of years as hundreds of solar cell and panel start-ups, attracted by a potential boom in alternative energy as oil prices climbed and by government solar-energy-subsidy programs, swarmed into the market. Because the industry’s barriers to entry are relatively low — crystalline solar cells are rudimentary semiconductors that are comparatively easy to make — the number of solar-panel and photovoltaic suppliers mushroomed nearly tenfold from 2002, when there were about 80 manufacturers, to somewhere between 500 and 800 today, according to iSuppli. In China and Taiwan, whole solar-energy sectors sprouted almost overnight. Stefan de Haan, an analyst for iSuppli, says industry profit margins,…
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The Case For Shorting Solar Stocks

The Case For Shorting Solar Stocks (FSLR, STP, YGE, SPWRA)

solar companiesCourtesy of Vincent Fernando at Clusterstock

Industry fundamentals are looking pretty bad for solar.

After enjoying a few years of tight supply, far too much solar production capacity is coming online as a result.

Government policy hasn’t helped either. For 2009, half of total solar production might not even be sold due a change in government policy from a major solar buyer, Spain.

WSJ: Spain accounted for more than 40% of all new solar panel installation globally last year, installing 2.7 gigawatts — five times the 2007 figure — out of a global total of 5.6 gigawatts. According to Spain’s photovoltaic industry association, Asif, the country’s market was worth €16.38 billion ($23.24 billion). This year, with cuts to aid and a more complicated application process, there has been no new installation in Spain.

Other countries are introducing aid to the solar sector, particularly the U.S. But the new U.S. measures aren’t expected to arrive in time to shore up demand this year. And while China has pledged support for the solar industry via economic-stimulus packages, support is likely to primarily benefit its own low-cost producers that have easy access to credit from state-owned Chinese banks.

Even based on bullish Barlcays numbers shown below, supply is likely to oustrip demand by 30-40% for many years. This could collapse prices down to merely the cost of production… or worse.

Sahm Adrangi: Currently, there is too much supply in all the steps. There is too much polysilicon. There are too many wafers. There are too may solar cells and there are too many modules. The oversupply began in 4Q08, and has only become more exacerbated as time has gone on. Polysilicon prices have crashed from about $400/kg to about $70/kg. Marginal cost is estimated to be around $35 to $45/kg, and I’ll bet that prices will get there soon enough.

Solar Oversupply

Perhaps companies such as Suntech (STP), Yingli (YGE), SunPower (SPWRA), and even First Solar (FSLR), despite its technology advantage, could be in for a long, nasty price war.

 


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Why First Solar Faces A Tough Future

Why First Solar Faces A Tough Future (FSLR, STP, TSL)

Courtesy of Jay Yarow at Clusterstock, Green Sheet 
 

 

 

 
 


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Yingli Green Energy, Trina Solar and First Solar

Trader Mark comments on a few solar power companies, noting that they’re inadequately differentiated by American investors. Here are his thoughts.

Analyst: Yingli Green Energy (YGE) and Trina Solar (TSL) Expected to Take Market Share from US/Euro Solar Makers

solar - from the breakthroughCourtesy of Trader Mark at Fund My Mutual Fund

I’ve been a long time investor in the solar space (circa late 06) and one thing that has really irked me over the years is the complete lack of differentiation. Much like the market as a whole nowadays, its "all or nothing" in this space. The one exception has been First Solar (FSLR) – an American "thin film" (different technology than most solar companies) producer. The Chinese names have especially all been thrown together in one pot and when its time to run up solar, they all go up together (in varying degrees) and when solar is out of favor they all get pole axed. Hence doing any due diligence is really a waste of time.

Yingli Green Energy (YGE) and a company that has cost me many real (and virtual) dollars over the years, Trina Solar (TSL) are 2 of the Chinese solar markets with good size, and the most integrated production models. This should have differentiated them over the years – but as I said above, not in American investors eyes. We like "big easy to understand, sweeping themes" – i.e. oil up, solar good. And that’s as comprehensive as it seems to get.

We are seeing some nice action in both these names today, on the back of an analyst report which is alluding to the advantages the two companies have. Now that silicon (which is the main cost component on the material side) has swooned after bottlenecks plagued the industry for 3+ years, the other main cost is labor. And you are not going to compete with the Chinese on labor costs…

  • Both Trina Solar (TSL) and Yingli Green Energy (YGE) shares are trading higher today following upgrades by Morgan Stanley analyst Sunil Gupta. He thinks both companies are going to take market share in the solar sector from U.S.-based and European rivals. Here are the details
  • Trina:


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Cautious About First Solar

Analysts Sound Cautious About First Solar (FSLR)

Jay Yarow at the Green Sheet of ClusterStock

First SolarFirst Solar (FSLR) gave an "impressive" presentation yesterday at its investor/analyst meeting about the future of its business, but it wasn’t enough to make analysts feel better about the stock.

We’ve received analyst reports morning from FBR, Deutsche Bank and Cannaccord Adams. Here’s their summaries:

Canaccord Adams downgraded from Buy to Hold with a $180 price target with a 25x multiple of its 2009 EPS estimate.

IMPACT: Modestly negative. First Solar remains the leading solar company, in our opinion; however, the company issued fairly ambitious targets with respect to the project pipeline and technology advances, and a lack of visibility into further positive catalysts remains. Additionally, the company’s business model and financial model are changing fairly significantly. As we suspected, the company’s new focus will lower GMs but likely increase income in absolute terms. While the company has finally properly set expectations, we believe that the decreasing margin profile may turn some investors off until the higher income and cash flows actually materialize.

FBR has an underperform rating with a $110 price target with 5X EV/sales and 12x EV/EBITDA, versus the its peer group (SPWRA, STP, TSL, YGE) average of 1.5x EV/sales and 8x EV/EBITDA.

We walked away from the First Solar (FSLR) analyst event impressed with the quality of presentation and the company’s long-term vision, which was communicated clearly, We continue to believe that First Solar is among a few industry leaders that have sound long-term and short-term strategies based on the realities of the industry. However, in light of the fact that the company has now publicly acknowledged that the business model is changing (revenue mix has changed from one item to three separate items), we think there is an increased probability of a capital increase (to beef up the balance sheet), while challenges remain in the near term (excess inventories, customer insolvency, tight credit market) that are the most important factors, which, in our view, will pressure the stock for the remainder of CY09. Additionally, we walked away feeling incrementally confident that the consensus estimates are too aggressive and do not reflect the realities of the industry.

Deutsche Bank maintains its hold rating raising its price target to $170 from $167, with a 20x C2010 EPS valuation.

First Solar entering a transitional period…
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Are Environmentalists Out To Get First Solar? (FSLR)

Courtesy of Jay Yarow at ClusterStock

Are Environmentalists Out To Get First Solar? (FSLR)

A private citizen told California investigators to check out the land rights First Solar said it acquired when it paid $400 million in stock for OptiSolar’s project pipeline. When the deal was announced, First Solar said it received "strategic land rights of approximately 136,000 acres." In reality, OptiSolar only had applications for the land rights.

Applications are considerably less valuable. If First Solar labeled those applications as assets, and priced them into the acquisition, then the company may be in violation of the law. At this point, it’s unclear if First Solar did or did not label them as assets. It’s also unclear if it’s illegal to price them into the deal, reports Dow Jones.

In spite of the haze around this minor infraction, it’s receiving a decent amount of coverage. Major news outlets are reporting on it as well as most energy/solar focused blogs.

Our intial reaction was that this was much ado about nothing. The Bureau Of Land Managment in California is worried about speculators paying for applications, holding them, then selling them to developers at higher prices. We don’t consider First Solar a speculator, so we thought it was long shot that they were violating the law.

While developing a project is not First Solar’s typical operating pattern, it is a direction the company is heading. In the relase announcing the OptiSolar acquisition, First Solar mentioned other construction projects it was working on. For this reason, we don’t think First Solar plans on just selling off its application permits.

We are curious about the identity of the "private citizen" that tipped investigators. After news broke that First Solar was under investigation, Earth2Tech reported that:

A couple weeks ago we received an email query from an exec at an environmental group wondering about the legality and ethics of solar maker OptiSolar incorporating yet-to-be-approved Bureau of Land Management land applications into its price when solar giant First Solar agreed to acquire the thin-film PV company back in March. I’m not sure how legal it is, I told him, but I would assume


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Zero Hedge

California Sanctions Wells Fargo - Suspends Up To $2 Trillion Banking Relationship For Next 12 Months

Courtesy of ZeroHedge. View original post here.

Treasurer John Chiang says in letter to Wells Fargo’s John Stumpf, board that he’s ordered suspension of WFC’s participation in “its most highly profitable business relationships” with California.

Bloomberg reports...



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ValueWalk

Tom Russo's 2Q16 Semper Vic Partners Investor Letter

By VW Staff. Originally published at ValueWalk.

Tom Russo’s letter to Semper Vic Partners investors for the second quarter ended June 30, 2016.

TO: LIMITED PARTNERS OF SEMPER VIC PARTNERS, L.P.

Results for Semper Vic Partners, L.P. for Second Quarter 2016, appear below, along with cumulative performance since L.P. conversion in July 1990. Partnership results are presented net of advisory fees and are compared to market indices whose returns include reinvested dividend income:

Semper Vic Partners Investment Position and Outlook

While my “global value” equity investors have generally enjoyed positive results year-to-date, there is little about today’s global political forces and...



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Phil's Favorites

Algeria Privatizes State Banks On Oil Price Slide

 

Algeria Privatizes State Banks On Oil Price Slide

By Erwin Cifuentes at Oilprice.com

 

A couple days ahead of the informal OPEC meeting in Algiers regarding the stability of oil prices, Algeria has announced its plans to privatize their state banks in reaction to the decreasing price of oil, according to a senior financial official interviewed for Reuters, and like Saudi Arabia, appearing to hunker down and ride out the low-priced environment that is likely here to stay.

The official, who wished to remain nameless, said that Algeria’s government would enact reform...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

EU Banks Eye $5 Billion Capital Respite on SEC Clearing Vote (Bloomberg)

A decision by the U.S. Securities and Exchange Commission may bring European Union banks a step closer to avoiding billions of dollars of capital charges on their trades in derivatives and other securities.

WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call (Reuters)

The World Trade Organization cut its forecast for global trade growth this year by more ...



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Mapping The Market

The Industry That Was Crushed By The Obama Administration

By Jean-Luc

Good riddance – cleaned up a lot of frauds there:

The Industry That Was Crushed By The Obama Administration

In early 2009, the seven largest publicly traded college operators were worth a combined $51 billion. Today, they’ve been all but wiped out.

When Barack Obama took office, America’s seven largest publicly traded college operators were worth a combined $51 billion, with more than 815,000 students enrolled at campuses spread across the country. The schools were flooded with with people seeking shelter from the recession, returning to school to pick up new skills.

Almost eight years later, the industry has been decimated. The seven largest listed operators are worth just over $6 billion, and the most valuable co...



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Kimble Charting Solutions

Japanese YEN testing triple breakout level

Courtesy of Chris Kimble.

Below looks at the Japanese Yen over the past 20-years.

For the majority of the time, the YEN has remained inside of rising channel (A). Now a big test is in play, after breaking support.

CLICK ON CHART TO ENLARGE

The Yen remained inside rising channel (A) from the mid 1990’s until 2014, where it broke below rising support. The rally that has taken place since the lows ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.



Date Found: Saturday, 26 March 2016, 02:36:15 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: ZH: Its a BULLARD market, the FED jaw boning is keeping the market up!



Date Found: Sunday, 27 March 2016, 02:31:30 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: RTT: World trade near 2008/09 lows. SP500 near all time highs. PLACE YOUR BETS! Roll up! Roll up!



Date Found: Tuesday, 29 March 2016, 02:42:11 PM

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OpTrader

Swing trading portfolio - week of September 26th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Members' Corner

Market Liquidity and Macroeconomic Bullshit

 

Market Liquidity and Macroeconomic Bullshit

Courtesy of The Nattering Naybob

STJL - "Apparently macroeconomics is all bullshit – ROFL! Paging Naybob now… Famous Economist Paul Romer Says Macroeconomics Is All Bullshit."

The Nattering One muses... Macroeconomics as practiced by academics and those in charge is pure voodoo. Better to chant over goat blood, bird feathers and scattered entrails...

As for reality, overnight CNH HIBOR (...



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Digital Currencies

Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.

...



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Biotech

Epizyme - A Waiting Game

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

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