Heavy borrowing, secure financing (15yrs), near term sales announcements, might be a play for the short term as it's revenues will be up and of course earnings call on the 15th. However the sector is becoming increasingly price competitive. Take into account yesterday's rally, SPWR was absent. To me it's speculative past earnings but i must say there is some momentum still left if you play it.

I'm not a day trader so I would pass on this, this one for me is too iffy/speculative. I might buy a couple only to experience and see where the momentum ends up, not enough to affect my holdings even 1/4 a percent.

What are your thoughts on this? Specifically C3?

 

FSLR is a better bet but solar is an alternative energy fad just like ethanol and I think the expectations are way too high for what can really be expected.

 

I bought into SPWR as a speculative play last fall.

In the solar group, I liked Sunpower because they have unique technology and I also liked that they were spun off of Cypress Semi - a generally well managed, innovative company. I think it is a plus that Sunpower are not a startup from scratch. They have plenty of funding, and they have very experienced engineering and management talent. Sunpower are still majority owned by Cypress. There are 2 sides to this ownership - This is bad because the class A (common) shareholders get only 1 vote/shr to the 8/shr that the Class B (Cypress-owned) shares have. It also could be bad if Cypress chooses to do add on offerings, diluting the market with more shares. But it's a plus because the parent has a strong vested intrest in seeing Sunpower succeed and it also gives SPWR a rather small float, which can be a big factor for hot momentum plays like this.

Sunpower acquired a company called Powerlight last fall. Powerlight is an established services provider that does solar engineering and installation and maintenance services. So what you get with Sunpower is a company that designs, makes, implements, and maintains solar systems - In other words, Sunpower can make money on every phase of any solar install project end-to-end. This puts them in a unique position in the industry.

It was up about 1.5% yesterday, and it is up about 120% in the last 9 months. So I would not call it "absent from the rally".

It's a very pricey stock right now IMHO, but they seem to be in position to be a market leader. They are profitable, flush with cash, $0 debt, and growing revenues and market share.

I think all the solar and other alternative energy plays will have good momentum through 2007 and early 2008 as all of the Presidential candidates talk up their grand alternative energy plans and grants and tax credits.

Andrew

 

I agree, but don't mind catching the fad early and double/tripple out like aklucsarits did.

Dang, 120%. Killer.

 

What do you guys like about FSLR? What advantages does FSLR have over its competitors?

FSLR looks very expensive to me vs even a high-flyer like SPWR. FSLR are trading at nearly 100x next years earnings, and they have a PEG well over 3 - That's more than double what SPWR is currently trading at, even after its recent run up... Why the premium for FSLR vs other solar plays like STP, TSL, SPWR, etc?

I've already got a few renewable energy plays I'm holding (SPWR, WFR, and ZOLT). But I'm looking for maybe one more pure play...

Andrew

 

There is very little I like about FSLR except they develop thin-film PV panels which I think is a superior technology to more traditional silicon wafer based panels (not that I know much about the details).

I hate the whole alternative energy complex, most especially those alternative energy "gimmicks" which are advanced through short-term populist political rhetoric such as Ethanol and Solar which have little or no prospect of being commercially viable and sustainable in my lifetime.

Neither of these two FSLR nor SPWR make money (which makes the whole EPS valuation model worthless) and the vast majority of their revenue comes from customers who also depend on subsidies and favorable tax treatment:

From SPWR 10K:

Today, the cost of solar power exceeds retail electric rates in many locations. As a result, federal, state and local government bodies in many countries, most notably Germany, Japan, Spain, Italy, Portugal, South Korea and the United States, have provided incentives in the form of feed-in tariffs, rebates, tax credits and other incentives to end users, distributors, system integrators and manufacturers of solar power products to promote the use of solar energy in on-grid applications and to reduce dependency on other forms of energy. These government economic incentives could be reduced or eliminated altogether. For example, Germany has been a strong supporter of solar power products and systems and political changes in Germany could result in significant reductions or eliminations of incentives, including the reduction of feed-in tariffs more rapidly than required by current law. Some solar program incentives expire, decline over time, are limited in total funding or require renewal of authority. Net metering and other operational policies in California, Japan or other markets could limit the amount of solar power installed there. Reductions in, or eliminations or expirations of, governmental incentives could result in decreased demand for and lower revenue from our products. Changes in the level or structure of a renewable portfolio standard could also result in decreased demand for and lower revenue from our products.

From FSLR 10K:

The reduction, elimination, or expiration of government subsidies and economic incentives for on-grid solar electricity may result in the diminished competitiveness of solar energy relative to conventional and non-solar renewable sources of energy and could materially and adversely affect the growth of the solar energy industry and our net sales. We believe that the near-term growth of the market for on-grid applications, where solar energy is used to supplement the electricity a consumer purchases from the utility network, depends significantly on the availability and size of government and economic incentives. Currently, the cost of solar electricity substantially exceeds the retail price of electricity in every significant market in the world. As a result, federal, state and local governmental bodies in many countries, most notably Germany, Italy, Spain, France, South Korea, Japan, Canada and the United States, have provided subsidies in the form of feed-in tariffs, rebates, tax write-offs and other incentives to end-users, distributors, systems integrators and manufacturers of photovoltaic products. For example, Germany, which accounted for 95.0% of our net sales in 2006, has been a strong supporter of photovoltaic products and systems and political changes in Germany could result in significant reductions or the elimination of incentives. Many of these government incentives expire, phase out over time, exhaust the allocated funding, or require renewal by the applicable authority. For example, German subsidies decline at a rate of 5.0% to 6.5% per year (based on the type and size of the photovoltaic system) and discussions are currently underway about modifying the German Renewable Energy Law (EEG). If the German government reduces or eliminates the subsidies under the EEG, demand for photovoltaic products could significantly decline in Germany. In addition, the Emerging Renewables Program in California has finite funds that may not last through the current program period. California subsidies declined from $2.80 to $2.50 per Watt in March 2006 and will continue to decline as cumulative installations exceed stated thresholds. Net metering policies in California, which currently only require each investor owned utility to provide net metering up to 2.5% of its aggregate customer peak demand, could also limit the amount of solar power installed within California.

I think the hype about solar has reached it's peak and like Ethanol last summer is played out. Like Ethanol a bunch of people got in and made a lot of money on the front end followed by another group of people who got nothing but pain. That's just IMHO not fortune telling, I could be wrong but I'm not going to against better judgement. It's just not for me.

 

Found some news.

Basically this company below, not only has the most 'efficient' panel for sale, they also have the cheapest panel for sale.

http://thefraserdomain.typepad.com/energy/..._electroni.html

The link below titled "Korean researchers develop uber-cheap solar cells"
http://www.engadget.com/2007/07/14/korean-...ap-solar-cells/

I guess this recent news supports the price competitiveness of this specific industry.

The interesting thing I found, coming from the link below is the Spectrolab (the firm that created the 'uber' stuff in the above link) is a Boeing company. Sure sounds interesting.

http://www.compoundsemi.com/documents/arti.../news/1449.html
http://www.spectrolab.com/com/com-inv.asp


Tech is weird. Spectrolab is not public but it shows how this firm plays out with the rest that are public.

 

This stock is still moving up and I have to chock its growth up to the sector. I mean everyone is on it, no wonder it's going up even if a fad.

I bought a few shares, had it climb up more than couple points and I'm getting out. Too scary a ride lol.

Got out at 70.20 (up 3.5%)

 

^^^ SPWR was up today because it got a favorable mention in Barron's over the weekend. http://www.reuters.com/article/topNews/idU...20070715?rpc=44

I thought you said you were not a day trader...

Andrew

 

I got scared lol, i really did.

Besides I only bought 10 shares just to say i was there! hehe

No way would i put my bread and butter in a speculative like that.