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The Oxen Report: Continuing Our Successes with Solar Energy

Welcome to Wednesday all. Today is a new day in politics with a new face and direction for the country…yeah right. The market is trading up slightly on news that the Republicans seized the House and anticipation of the Federal Reserve meeting to decide interest rates. We are currently in two positions that are looking good. We are getting out of our Overnight Trade in Aetna (AET) at 30.75 for a 2% gain. I missed the big upswing, but the stock was good for as much as 5% in gains. We are also in Cloud Peak Energy (CLD) for a 1/2 position. We got out of 1/2 of CLD for a 4% gain yesterday at 18.38, and we are still holding onto the rest. 

Additionally, I have posted the latest results from the month of October. We are up 109% on the year in our Buy Virtual Portfolio, and we are up close to 40% on our Short Sale Virtual Portfolio. Check it all out here!

We have had a lot of success with the Midterm Trades as of late, and I want to continue our successes with them…

 

Midterm Trade of the Day: Solarfun Power Holdings, Inc. (SOLF)

Analysis: Solar stocks have been quite good to us in the longer trading spectrum when the opportunities are right. Today, we have another very positive opportunity in Solarfun Power (SOLF). Solarfun used to be my favorite stock because I made 60% on it in two days back in 2008. The company, however, has not become one of the stock leaders like I had hoped. Companies like Trina Solar, SunPower, and Yingli Green have become the leaders in silicon PV cells, but that does not mean that in its own windows SOLF cannot represent a solid trade.

Next Monday, SOLF is slated to report its earnings at 0.49 EPS vs. one year ago at 0.37. The company has beat earnings three out of four of the last quarters by more than 80%. These blowouts are typical for this company, and it was one of the first items that attracted me to it. When a company has such considerable beats consistently, it tends to make investors flood the stock prior to earnings. SOLF is in a great position to do that with its current valuations below fair valued and earnings on the horizon.

In addition to its own success, the solar industry is looking good this quarter. First Solar recorded a quarterly beat and JinkoSolar beat EPS estimates by over 70%. The next company is slated for Friday morning, and that is ReneSola (SOL). The company is slated to report EPS at 0.52 with a swing to profit from the year prior when they recorded an EPS of -0.14. In addition to SOLF, LDK Solar (LDK), GT Solar (SOLR), and JA Solar (JASO) are all reporting on Monday evening or Tuesday morning next week. Between SOL and the four reports next week, solar may start to see a heightened demand and this will push up prices.

The push is even more attractive for SOLF over the others. The company has an RSI near 40, which is well below fair valued at 50. The stock is oversold and near its lower bollinger band. SOLF now has about 6% downside to its lower band while 25% upside to its upper band. The stock has pretty wide bands, so I would expect them to narrow, and that can only occur if SOLF goes back up. 

Solar has taken a slight beating to start this week and end last week. This is a great opportunity to buy right before we get into the heart of the reporting season for solar. 

Entry: We are looking to get involved at 9.88 – 9.98.

Exit: We are looking to exit for a 3-5% gain.

Stop Loss: 4% on bottom.

 

Good Investing,

David Ristau


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  1. Oxen Alert – Midterm Trade in Solar Again!


    Hey all,

    We have a new Midterm position in Solarfun (SOLF) for a hold into Monday. We are looking for at least 3-5%, but this could be much, much more.

    Check it all out here!

    Good Investing!


  2. Oxen Alert – SOLF Entry


    I am in at 9.91.

    Good Investing!


  3. i am also in –


  4.  David, I never got into CLD, looks like it gave all and then some. Would you recommend getting in and waiting for a bounce?


  5. BSMP -

    Good luck!

    Amatta -

    This is a great entry point. We are 1/2 out for 4% gain, and we will look to unload the position again for similar gains hopefully tomorrow. I feel confident about their earnings as well, so I may hold some (maybe 1/4 or 1/2 depending on tomorrow) into their announcement. Have you had any better luck lately??


  6. Yes a little better I missed again the big one with JKS though


  7.  I might hold for a little, to see if Phil is right about the pullback after the Fed and then get in on this and a couple others 


  8. Amatta -

    Sounds good!


  9. Oxen Alert – Longterm Update

    I am working on a new way to log results for this that I will have out before the end of the day. I will log the closing price on the day we initiated coverage and % changes to current price. That way we can understand how we are doing on our positions.

    F - The company reported their October sales this morning. They saw sales increase 33% in China. The company reported sales increase of 19.2% in October, which was above estimates of 18.4%. The stock saw a 25% increase in truck sales and car sales rose 20% led by the Fusion at 29% and Fiesta at 23%. This is a great sign for the company of things to come. Continued beats in November would definitely give us reason to consider increasing our Q4 expectations and rise FV estimates.

    SPWRA, TSL, and FSLR – All got good news that the climate change laws in California were not repealed in the latest polls, and it should continue to provide good subsidies for these stocks.

    GMCR - Another law firm investigating the company. The stock is less than 10% off its highs of where it was before announcement of investigations into the company, which means this is a great place to short the stock. I am opening a short sale on GMCR if it hits 34.25.

    Good Investing!


  10. Oxen Alert – Longterm Ratings Performance


    We are going to start logging longterm ratings performance. This will be updated on a weekly basis on Mondays.

    Here it is:

    Date of Initial Rating Stock Entry Rating Exit Rating Current Rating FV Estimate Initial Coverage Price Current Price Percentage Change
    09/10/10 FSLR Below 144 Above 216 Hold 174 138.41 136.22 -1.58%
    09/14/10 SKX Below 22 Above 32 Hold 28.5 22.92 19.42 -15.27%
    09/17/10 ALGN Below 15 Above 24.50 Hold 22 19.29 17.28 -10.42%
    09/21/10 CREE Below 44 Above 61 Hold 56 50.38 51.31 1.85%
    09/23/10 RYL Below 15.25 Above 22 Hold 20 16.82 15.35 -8.74%
    09/27/10 FTR Below 13.50 Above 15 Buy 16 8.24 8.93 8.37%
    09/28/10 TSL Below 27 Above 45 Hold 38.5 27.5 26.67 -3.02%
    09/29/10 GMCR Below 17 Above 25 Sell 22 31.06 34.22 10.17%
    10/01/10 JWN Below 33 Above 52 Hold 45 37.11 38.76 4.45%
    10/05/10 JCI Below 27 Above 43 Hold 35 31.76 35.47 11.68%
    10/07/10 PAYX Below 27 Above 36 Hold 34 27.58 28.12 1.96%
    10/13/10 SPWRA Below 15 Above 24 Buy 21.5 14.24 13.27 -6.81%
    10/20/10 F Below 11.50 Above 20 Hold 17 13.64 14.68 7.62%
    10/22/10 JACK Below 24 Above 31 Buy 30 23.6 23.81 0.89%
    10/29/10 BIG Below 41 Above 59 Buy 54 31.37 31.35 -0.06%

     

    Good Investing!


  11. Oxen Alert – SOLF Exit


    Hey all,

    I am taking 1/2 exit on SOLF at 10.32 for a solid 4.5% gain!!!

    More to come in my opinion!

    Good Investing!


  12. solf is doing well – are you holding for more?


  13. BSMP -

    See the alert I just sent. Exited 1/2 at 10.32 and holding the rest for more!


  14. Oxen Alert – GMCR Short Entry, SOLF Exit


    Hey all,

    I am taking another 1/2 off the table at 10.48. That is another 6.33% gain there. I am going to let the rest ride through the end of the week. I was not expecting this right now, but we want to lock in gains in case something happens to drop SOLF.

    As I commented in my Longterm Ratings Update, I would take a short position if GMCR hit 34.25. The stock has just hit that price, and I have opened a short position here.

    Good Investing!


  15. Position Update -

    CLD – We are down about 0.5% moving into the end of the day. I am hoping that we can lock in more gains moving into tomorrow before earnings. If we can get 3-4%, we can take the whole position off the table. If less, we might hold some into earnings.

    SOLF – We have exited 3/4 of the position for an average position of over a 5% gain. We will look to exit the last 1/4 moving into Friday or Monday. I think this position could still fly higher, but we wanted to lock in some of those gains already.

    GMCR – We opened a Short Sale in this one at 34.25, and we are looking to pull 2-3% out of this one. The stock has rocketed way too high and is barely pricing in the fact that they are under investigation for financial miscues from about 8 firms now.

    Good Investing!


  16. David   Thanks for SOLF 2/3 out with 5%


  17. This posting was stamped at 10:23AM but I did not receive it until 6:00PM. Many of the reports from PSW are that way. Would you please tell me why I got long dalay like that? Was it because I used Yahoo!Mail or because I’m a report only member?
    Thank you for your help,
    Loi Nguyen.


  18. Dave -

    Your welcome.

    Lvn -

    Have to talk to Phil about that. I am only here for a few more weeks…


  19. Oxen Alert – Out of Office

    Hey all,

    So, I have to travel tomorrow and have a conference with Fifth Third Bank on Friday. I will not be able to be on tomorrow except in the early morning. I will do an update in the morning to help us figure out what to do with our positions, but I will not be able to be on throughout the day.

    Sorry about missing the next two days, but this is an important conference and it starts tomorrow night in Cincinnati.

    Thanks!

    Good Investing!


  20.  Hey all,

    So, I have to travel tomorrow and have a conference with Fifth Third Bank on Friday. I will not be able to be on tomorrow except in the early morning. I will do an update in the morning to help us figure out what to do with our positions, but I will not be able to be on throughout the day.

    Sorry about missing the next two days, but this is an important conference and it starts tomorrow night in Cincinnati.

    Thanks!

    Good Investing!