First Solar Now in Its Third Leg Up
After being beaten down badly along with the rest of the solar
stocks and general market, First Solar (FSLR) has been one of the first major names
to bounce back clearly through previous resistance Wednesday in the 280
range to all-time highs. 
When examining the strength of previous moves
this appears to be the middle of the third major rally. The first was
from 33 to 123. The second was from 75 to 280. This latest rally
started at 140 and judging from the previous two will probably continue
to 400, perhaps as soon as the mid-May earnings report.
I'm no expert in techical analysis, but as a full-time investor I have to know the basics. I tend to only use techinal signals when they can be explained through fundamentals. This latest run-up can be justified through higher energy prices, new renewables legislation in the U.S., and a sense of optimism in the general markets.
Etrade recently added some new data to their research section showing that there has been tremendous institutional buying of the shares since last week. For exaple, on 4/15 instituional investors bought 142,377 shares and only sold 23,551. When they start buying/selling they tend to continue to do so for months on end. You simply can't accumulate a million shares all at once.
Also, 94.3% of FSLR's shares are instituionally owned, meaning there is a very small float. This is one of William O'Neil's (the founder of Investor's Business Daily) keys to stockpicking as stocks with a small float can easily skyrocket, as was the case with FSLR in 2007.
Disclosure: I have been long FSLR since Feb 2007 and will stay long until Feb 2012 as originally planned.
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This article has 81 comments:
-scott
marketbar
I was telling people that when forward PE rolled over this year to over $5, no one would consider FSLR grossly overvalued anymore, and the shorts would run for cover. Sure enough short interest has fallen off a cliff. They are likely shorting FSLR's competitors instead such as SPWR. Basically the longer a stock stays "overvalued" the more the market gets used to it and no longer considers it overvalued. Hence the theory of moving averages.
The bearish argument against FSLR is one based on short term valuations. That should be left to swing traders to figure out and not long term investors.
Major Holders Get Major Holders for fslr:
BREAKDOWN
% of Shares Held by All Insider and 5% Owners: 35%
% of Shares Held by Institutional & Mutual Fund Owners: 45%
% of Float Held by Institutional & Mutual Fund Owners: 69%
Number of Institutions Holding Shares: 328
1). We are arguably in a bear mkt (or at least fighting one off) and if we do break 12700, we're looking at a big swing down. Nothing, not FSLR, the 4 horsemen, are going to be unaffected. In FSLR's case, simply b/c the stock has been a meteor and shorts are in short supply, you can look at a case of piling on which will take it down fast.
2). If you assume that Dec. '07 was the first wave up and this second wave up is now in progress, your analysis could be correct, but if you assume that we are now at the end of a macro 1st wave up (and this is quite reasonable since FSLR is a young stock), I would expect FSLR to hit it's 200 day EMA (currently around 180) before it hits $350.
Regardless, it's printing a nice doji today (if the current action keeps up) and if you look at that in conjunction with declining volume on the daily chart, I wouldn't be buying at this juncture but waiting to see how well it holds up above 300 for a couple of weeks. This doesn't obviate your long-term argument (and 2012 is a nice time frame), but there are some junctures where tweaking your strategy (making long-term purchases on increased margin power) can yield you better gains and less heartache and I believe we are at one of those junctures: Just sit this one out a month or two--if you are right and your margin power continues to increase, you can add without the risk of this market want to continue a mean bear market leg down. Good luck.
Tellurium production is about 500 TPY. Copper's historical trend and current price clearly indicate doubling production by 2016 is possible, and as explained before, a doubling of recovery efficiency is possible. 1.5 micron is possible which means 0.05g/Wp is possible. They can also out-buy everyone else's tellurium. So 2000 TPY at 0.05/Wp is 40 GWp/y.
FSLR could easily have a PE=1.6 and produce 40 GWp/y while accepting half to 1/3 their current profit/Wp and thereby cost 1/2 as much as coal and nuclear. I get 2.5 cents/kWh for FSLR. Coal and nuclear could easily reach 5 cents/kWh by 2016...even if the dollar doesn't fall anymore. The 2.5 cents/kWh is calculated from their guidance:
($0.60/Wp cost + $0.40/Wp profit + $1/Wp installation) x 13% x 1000 Wp/m^2 / (7 kWh/d/m^2 x 365 days x 35 years) = 2.5 cents/kWh
The $1/Wp install and 35 years are optimistic. 7 kWh/d/m^2 is very best locations in U.S.
I don't know much about FSLR's business, but everything I've read indicates they are in a good position wrt industry+technology. I used to try to look at fundamentals of stock I traded, but switched to TA as so often the fundamentals (and the interrelationship of fundamental factors) are ignored wrt stock evaluation.
I like candlestick charts and I post one final observation. If the candle on the weekly looks like the candle that printed the week of 12/24/07, that portends some pain for longs that could be avoided by hedging here. That drop was $140 (from 283-143). This drop can easily be to $200 and still not violate any long-term uptrend in the chart (nor do I expect it to).
I think we agree on FSLR's long term positioning, we just have different opinions on how well it will hold up in the market that's downtrending strongly.
Traders must love this stock tho.
S
At the end of the day, it’s a supplier to a utility. Even in the 70's when equity was being floated for utilities their PEs were nowhere near this and those were 'go go' years for utilities and the suppliers. Give em 20 turns for the technology but that’s about it. buckle up for the ride and buy some puts.
And like STP showed us a couple of months ago--and as AAPL and GOOG showed us recently, and even as SPWR showed us today--just beating and even raising guidance isn't enough if you want to continue to be valued at even a PE of 40 or 50, much less at 100+.
At some point--maybe this quarter (like SPWR), maybe next quarter, maybe after that--FSLR will fail to meet increasingly outrageous expectations that the market sets for it, and it will no longer justify multiples of 100 against FORWARD earnings.
Please know that I do not base my opinions on an expectation that solar won't do great (it will) but a PE of 100 in my book is reserved for companies that will double earnings just about yearly, and I don't think FSLR can do THAT. I do believe there are three low-PE solar stocks that offer a much better risk-reward ratio, and they are CSIQ, TSL and SOLF.
I hold a considerable position in the first two. I do not hold any (short or long) position in FSLR, and doubt I ever will. On momentum stocks like FSLR, being short can kill you because you never know when the hammer will drop. But it almost always does.
Remember how CSCIO and DELL could never do wrong a few years back and were garnering multiples in the 40-50 range?
Jack Yetiv
Tiedeman
You have yourself a recipe for catastrophe, So you put more than half your investment into this one stock FSLR, and you haven't done as much a DD as figuring out what percentage of the floats are owned by institutions? And you keep kuying on margin and leave only 10% safety allowance. have you thought about the possibility that one day you wake up and FSLR has dropped 60% from the previous day's close. That's more than a merely fluctuation and would not allow you any opportunity to sell, before you are totally wiped out in a few minutes.
Such catastrophic drop could happen, if for example FSLR announced that they are canceling the plans to building the remaining 3 Malaysia factories, shut some production lines down, laying out workers, and canceling half of their sales contract, because they simply could not find enough tellurium?!!!
Read my recent tellurium article. I believe I presented a very convincing case, raised very serious accusations that FSLR should immediately sent a lawyer to talk to me or otherwise do something to control damage. I emailed them more than a month ago to raise the CdTe supply issue, and now published the article to openly talk about it. So far I have not heard anything from FSLR. Why are they so quiet so far? Why are theyso secretive regarding their raw material supply?
seekingalpha.com/artic...
Like you, I also have extremely concentrated positions in a narrow sector. Virtually the totality of my 401K is on long positions on PAL and SWC, the only two primary palladium producers in the whole world. But unlike you, I have done a tremendous amount of research in the PGM market and in these two companies. I know what I am buying, and I have full confidence these are the best short, mid and long term investments I could find, at a dirt cheap price. So that's totally different from your style where you blindly ignore critical information and refuse to even talk about it:
seekingalpha.com/artic...
For the sake of safety of your own investment in FSLR, shouldn't you make a phone call, or even buy an air ticket to fly over, show them my tellurium article, and demand them to publically disclose detailed and quantitative information on their tellurium supply?
I shorted a grand total of 70 shares of FSLR today, Friday. A very small stake. But I was willing to do my research on tellurium even on such a small stake. What about you? Care to do your own research and write up something on tellurium?
I would never short FSLR because simply watching the stock everyday in comparision to other solars, I have had this strong feeling that a very large pool of money has no intention of selling. SPWR crashed today for the opposite reason: plenty of people (like me) thought it was a good short-term bet and were getting out after the so-so news. This won't happen with FSLR if they stay near guidance.
FSLR refused to budge lately on good news, and refused to sell on bad. It's solid where it is.
I don't dispute that alternative energy will become increasingly important in the future. But the solar stocks have already priced in years of growth. It's like people that bought Google at $750 - you might break even or make money eventually, but the business is temporarily overvalued. (And yes, I make that statement as google is back at $520 after a ridiculous $70 gain.)
I don't dispute that alternative energy, including solar, will become more important and widespread in the future. But the level of your pumping is irresponsible. Wait until solar doesn't need to be subsidized...
Didn't STP have a lot of touters (many of whom disagreed with my recommendation of CSIQ 2 months ago, in favor of STP, and CSIQ is up almost 50% since then and STP is down about 10%), who are now a bit less vocal?
Same question for SPWR. Zawy says:
"SPWR crashed today for the opposite reason: plenty of people (like me) thought it was a good short-term bet and were getting out after the so-so news."
I respectfully disagree. SPWR crashed because although it announced a great quarter, it wasn't OUTRAGEOUS, and it needed to be to justify a PE in excess of 50.
To the FSLR cheerleaders in the crowd, please give me your expected EPS for 2008, 2009, 2010, 2011 and 2012, and tell me how you arrived at those EPS's.
Thanks, Jack Yetiv
* Brokerage Firms
2.50% Holdings
* Investment Managers
41.80% Holdings
* Strategic Entities
49.90% Holdings
* Non-Institutional
5.80% Holdings
Also yahoo is notorious for having inaccurate and outdated info. Their short interest data is rarely ever accurate. It's possible, however, that etrade is double counting people who qualify for two categories.
Zawy, I've never played poker on someone else's bankroll because I've never needed to, but many pros do. Also in poker no one in their right mind would lend you money at Broker Call - 1% or 3% annually like I negotiated from Etrade. In real terms it's actually closer to 2% since the interest paid can immediately be offset but the gains can be deferred as long term gains indefinitely.
My primary investment used to be real estate before FSLR started skyrocketing. Luckily I sold several houses last year, but I still have a lot of exposure to the declining dollar. FSLR acts as a hedge against the declining dollar and rising energy prices, which is part of the reason I have no problem pyramiding up fully margined.
Zawy, what happens between 2012 and 2016 is irrelevant. Looking too far in the future is the most common mistake of engineer-investors. Just like in poker you want to think exactly one step ahead of your opponent and no more. e.g. if you're opponent thinks you have aa then it helps to think he thinks you have aa. But if he's an idiot and doesnt care what you have then it's a mistake to think he thinks you have aa.
A good example of this is the threat from CIGS. I nearly passed up FSLR at $33 because of Nanosolar's outrageous claims. Then I realized that it was in too early of a phase and that most people hadn't even heard of CdTe yet let alone CIGS. If less than 1% of investors have heard of the tech it's probably too early to invest. If more than 75% it's probably too late. When you think of Intel, Microsoft, Ebay 75% penetration was the exit point where you could've rotated into a newer generation of tech stock.
Since this article was my first based on momemtum, I figure FSLR won't be a household name for several more years. Still plenty of upside.
s.frankola, judging by volume alone FSLR is trading $1.8B a day. In other words if they split 10-1 they would often be the #1 most active on the nasdaq. That by itself shows tenfold potential. BTW, the day after I first bought the stock at $33 it jumped to $45 and shorts declared it was overvalued. I put a 5 year price target of $400 on it. Obviously I think it's going higher than that now. When I think it no longer has a tenfold increase left, I'll sell it and buy something that does.
you are right that projections too far into the future are useless-dangerous. however, this is EXACTLY(!) what your investment seems to be based on. I agree with Jack Yetiv thet the strong euro and the weak $ will bring moree windfalls to fslr and lead to another blow-out quarter. (The market has been discounting it with the recent rise, though, imho). Still, a 100 forward P/E that comes from strong growth plus windfall (currency) profits is ridiculously expensive for a stock like fslr.
You say, P/E does matter only to "mature" stocks. C' on ! It matters to EVERY stock, even the most hyped momentum stocks. Because people pile in expecting this P/E to come down a lot , and very fast - faster then the rest of the market thinks. (except of course for pure TA-guys, but they, as a group are continuously losing lots of money in the market anyway) In short, these stocks get bought by people who think (or implicitly assume) they are less expensive (cheaper) than the market assumes.
And here comes that too-far-out projection into play. because in reality you project that stock to reach a "reasonable" P/E based on todays 290$ stock price over the coming 4-5 years. you assume that the industry will not change for another 3-4 years - heck you have seen how fslr coulöd change that industry! so simply extrapolating current trends for another 4 years is probably one of the strangest things to do with such a technologically dynamic and very much politically influenced industry like solar!
what really escapes me though, is why you and zawy assume that fslr will ever get that much of contracts?? everybody can set up plants for 40GW capacity. no problem. getting demand for it will be very difficult, though. fslr's solar modules are much less efficient than silicone and so their argument is price. now, i would certainly pay a bit more for a more efficient solution because the roof space of my house is definitely limited. I want to get as much energy out of it as possible - because i save money that way over the next years!
the wildly optimistic projection that fslr will simply continue to produce at half the price of the competition is naive, imho. silicon will get drastically cheaper over the coming quarters as wafer supply increases manyfold. gone will be fslr's cost advantage
summing up: fslr is a story where everything has to go perfect for years to come to somehow justify the current stock price. the slightes bumphole and the stock collapses.
i would strongly suggest you deleverage before you get deleveraged
i for my part, will take the short side of the trade the moment i see an exhaustion move and after their next quarterly report - whatever comes first
You seem to think silicon costs will get cheaper than FSLR's expected $0.60/Wp (pre-install) and 13% efficiency (which determines install $). What do you think silicon technology production cost and efficiency will be?
Interesting side note, i think it was global solar's page where i saw them selling "SunTracker(TM)&q... that increases effective efficiency by 30%. It would require more land area to spread the modules out because of shadows. It would be interesting to know how much $1/Wp that would add.
Can solar cells be used in areas that have hail at least once every 10 years, i.e. half the U.S.?
$4/Wp installed in good locations (6 kWh/d/m^2) results in the following costs in cents/kWh:
25 year usefulness and 0% loan: 7.4, 5%: 12.8, 7%: 15.4
35 year usefulness and 0% loan: 5.2, 5%: 11, 7%: 14
I used 0% because a 7% loan now for a house installation might be 0% after tax deduction and a 5% inflation increase for energy prices for the next 30 years.
Current home costs of $8/Wp (with battery back up) are found by doubling the numbers above. 2010 utility costs of $2/Wp are found by cutting the numbers in half. Efficiency does not matter except to reduce installed cost. If California homes today used their hybrid car batteries as the battery backup, Californians would find today's solar cells only twice as expensive as $4/gallon of gasoline. Not needing battery backup other than the car offsets the increased price of the car.
For the intermediate term horizon as long as FSLR maintains the #1 position from a technological standpoint their stock will go up. Even if they lose the #1 position I'll have plenty of time to sell, probably at a higher level than it's at now since the market is so slow to react to technological news. It took the market approximately 18 months AFTER the release of the products to decide the Wii and the IPhone were a success. It still hasn't figured out that the game is over for the like of AMD and Ford, which is why AMD took the market down upon reporting lousy earnings.
You don't have to worry about me my family and friends have been warning me for years to take it easy at the poker table, etc. I never played a hand of poker until I finished reading 5 or 6 books. 99% of poker players lose but I had a streak of 34 straight winning months. FSLR has also been up ever month since IPO except 2. In a game where most players actually win of course I'm going to be as aggressive as possible without endangering my entire bankroll. As I said I also have assets in real estate.
You are just full of it and you don't know what you are talking about. You claim 99% of people lose in poker games, and then you also claim you have a streak of 34 months of only winning and never losing in the poker games? If 99% of average person always lose in a poker game, why would any one play poker? Gambling by definition is a game based on random chance, you always have 50% chance of winning and 50% chance of losing. If you know some one who loses 99% of the time, tell me who that guy is and I will sit on the opposite side of that guy so I have 99% of chance of winning. A streak of 34 months of winning only has an odd of 1/2^34, or one in 17 billion. It simply does not happen.
You wouldn't be holding some FSLR long positions and pump the stock here if you have a streak of 34 months of winning and not losing. You would be continue your poker game because obviously it's a faster way of making money. If each winning months increases your money by just a double, you would have turned $1K into $17180B, 30 times richer than Bill Gates. How come I did not read about your poker wins on tabloids?
I have entered a FSLR short yesterday (Apr. 17) and covered today (Apr. 18) with a moderate profit purely on technicality. I will short again after FSLR's earnings report.
Next question for both of you, why spend so much time on multiple message boards talking about a stock? Anthony, you are margined to the hilt and making a killing, why not just enjoy the ride and brush off all the haters.
Marc, why not just sink a bunch of cash into FSLF LEAP Puts and move onto to a more constructive activity than fighting on these boards?
The amount of touting I see, in place of balanced discussions just makes me doubt what is being said. I enjoy hearing different points of view, but they rarely come from the same person.
Just to rehash some old calculations done by others a year ago. Annual copper production is 17210000 tons. At 500 ton per 1 pound Te that = 34420 pounds of Te. at 8 grams per panel FSLR can produce about 3 MW per pound Te which already gives an indication of how negligible the costs are. 3 MW retails for over $6 million which one pound of Te according to mark costs about $300.
Anyway at 3 MW/pound FSLR can produce 103 GW panels/year. So when the stock is trading at 10000 that will be the time to tackle potential Te supply issues.
You have just shown your inept in math. How could you play poker if you can't get basic math correct? You are telling me global Te production is only 34420 pounds, or 15.63 metric tons? That's far less than my estimate. And you are saying one pound tellurium produces 3MW of solar panels? That's 43000 panels sharing one pound of tellurium, each panel getting only 0.01 gram. Don't forget there are other applications in dire need of tellurium than CdTe solar panels. You ever drink water from a water cooler in your office? It contains thermoelectrics components made of tellurium. 150 metric tons of tellurium used just in that one area of application, and that was told by VNP, the main CdTe supplier to FSLR.
My point being the valuation is way too high for a industry that is not mature yet....what if a breakthrough technology is being developed from any given company...who will remember CIGS...and maybe you are right they won't miss expectations for a couple of Q's but you better be prepared that they will miss at some point and then you have your personal waterloo...The risk/reward profile is just not their what are they going to do in the next 52 wekks?Double and be worth 44 billion dollars you have got to be kidding me...or even just gain 50 percent and be worth 33 billion for an industry that is not mature....i smell trouble....i like smaller solar stocks with more room to grow...
Marc Anthony - Just wanted to say that telleraium article was great and pointed to just a few risks that go along with that stock...very well researched...two thumbs up!
With kind regards from Germany,
CW
I did not mean insult to any one. I currently hold no short position in FSLR until after FSLR's coming earnings, because I want to concentrate on my PAL/SWC, as I expect an absolutely blowout Q1,2008 for these two, as the PGM metals price rally which started at the end of January,08 can finally be reflected in quarterly results.
I do not hold hostility to any one long in FSLR. I have nothing to gain making unnecessary enemy. My own personal charater compels me to stick to truth and due diligence research, even if insisting on truth may not always bring the best interest to me. I wish SeekingAlpha has a feature to allow users to edit/correct/delete ones own comment. If I made a math error and discover it I would appologize imemdiately, and if I made that many math errors in one paragraph I wish I could find a hole in the ground to craw in.
Being a successful investor requires some basic math skill and intelligence, willingness and capability of doing independent research to find out fundamentals of companies and markets, discipline and determination to stick to the convinction of one's findings, but willingness to quickly change direction if new information surfaces to show that the original research was wrong.
I see Andrew had streak of 34 consecutive wins in poker games but would not walk away until he finally loses it all in one final loss. Many gamblers ended that way, they collected an incredibly long streak of winnings but always ended it all with one final lose, and walk away empty handed.
For Andrew's own good, he needs to take profit away and go find the next big thing, at least he really needs to spend his time, do his own independent research on tellurium, and write something to defend FSLR if he could. The growth of FSLR seems to be unstoppable, until tellurium shortage stops it all. He could will join the chorus of others and ridicule my tellurium research. But be aware that in almost all cases, the truth is first learned by a very small group of people and ridiculed by the populance. And that the majority of people lose money in stock markets, only a minority actually make big profits. If every one believed my tellurium story and it becomes headline news, wouldn't FSLR be trading at $20 a share already?
Likewise if every one is as convinced as me in my view point on PGM's bullish outlook, PAL should already be trading at high double digits. The truth is always slow to be learned, even when it is put under broad daylight.
My tellurium story is we already see explosive tellurium price rally started in late January, 2008, with a current installed FSLR production capacity of 0.3 GW per year. I do not think they can afford to turn on any of their Malaysia factories now. I think they will have to shut down production lines, one at a time, until eventually other industries consumes ALL of the tellurium, and there is none left for CdTe solar panels.
lithium batteries needed for 60 million small EV would require six times the current annual lithium production.
2^4 x 0.4 GWp in 2008 x $2/Wp x (1-0.065)^4 = $10 B gross in 2012.
2^4 x 0.4 GW = 6.4 GWp in 2012, costing $0.60/Wp to produce is $3.84 B cost, giving 10-3.84= $6.16B profit, PE=4 at today's price.
I consider your numbers on FSLR an entertainment so I am not going to dispute them. Thanks for mentioning Tesla and the super capacitor that uses barium. I surely will look into it. China has plenty of barium and it is the only country with abundant barium resources.
Super energy storage devices is a hot area of alternative energy movement. Lithium batteries are already too expensive used in cell phone. Used in hybrid vehicles is just prohibitively expensive. Currently NiMH batteries are still the only sensible choice for hybrid vehicles. So demand of nickel must grow and the price must go up. That is also why I like PAL better. It produces a lot of nickel on top of palladium and platinum.
seekingalpha.com/artic...
If last year's contracts did pay a premium for being early adopters and FSLR lowers the price of new orders faster to reach true grid parity in 2012 (probably needed to stimulate demand), their profit will be $0.48/Wp giving a PE=7 at today's market cap, if they reach the $0.60 as claimed and if growth slows from 160% yoy to 100% yoy. PE=1.6 at end of 2011 if growth does not slow and costs are $0.80 and 6.5% reduction is kept in place.
This not for entertainment or merely an engineer's mental masturbation. Only by going through the calculations can you know when Te will run out and what the profit, revenue, demand, and PE will be. If you believe production cannot keep up or costs will have to come down based on decreased demand, you can change the inputs accordingly. Because of the simplicity surrounding FSLR, these equations apply more than to any other company, including any other solar.
PE = mc/(p*W*(1+g/100%)^n)
mc=market cap ($22B today)
p=profit/Wp (currently $1/Wp and current contracts do not allow this to decrease for 5 years if cost/Wp goes down as FSLR predicts)
W = Wp produced in 2008 (0.4GWp from guidance)
g= yoy growth (160% by 6-year trend, 180% by 2-year trend)
n=years after 2008
I
Electricity price is getting more expensive, and leaching looks more and more economical. What do you have to persuade copper companies to NOT switch to leaching?
Intel and other electronic vendors have already begun shipping actual phase change memory chips. This is a giant revolution in the electronics industry since sliced breads.
I guess the LCD market is the biggest threat to FSLR. I don't think they require more than 0.1 gram per large screen TV, which means FSLR doesn't have a chance in getting their hands on Te if LCD trend continues (50% of world Te production this year and increasing 30%/yr ?).
If you know THAT, let me ask you a simpler question.
What production and EPS will FSLR announce when it reports earnings?
If you can't tell me that, how can you tell me what FSLR will do 16 quarters from now?
Jack Yetiv
Jack Yetiv
Also, if FSLR's 2008 earnings are so clear, why does one analyst think they will make $1.87 and another thinks they will make $3.50?
The spread for 2009 is even larger--$3.25 to $6.69.
The point is, there are so many variables that will control what FSLR does in 2008--much less 2012--that calculating FSLR's earnings in 2012 using a simple formula has very little chance of being right.
By the way, when is FSLR announcing earnings? I looked on their website and there is no info on that under "Events."
Jack
which explains why analysts are constantly way off when it comes to FSLR estimates. The reason there is such a large spread isn't because there widespread disagreement, it's simply due to the fact that some analysts are slow to update their estimates. The newest estimates are the highest and every analyst has been too low every single quarter. When FSLR went from $30 to $100 some analysts still had old price targets at $45. When they updated the target it would instantly shoot to $125. Moral of the story is don't go by analysts estimates. Do the math yourself.
Basically the analysts use the most simplistic model. e.g. if you saw a dragster going 125mph half way through the 1/4 mile and calculated finished time either by doubling the current running time or by adding the time it would take at the rate of 125mph you would be ridiculously off as you're forgetting about the acceleration rate. In the same way estimates are static and don't factor in either first or second growth derivatives. When I say to be exactly one step ahead of the curve and no more I mean one derivative ahead. If the market is trading on earnings you have to trade on earnings growth. If they are trading on growth to have to trade on the growth in growth, and so forth. Despite what some dart-throwing index buyers think the market is rather unsophisticated and trades mostly on earnings with less emphasis on growth and even less emphasis on growth ^ 2
The two arguments against FSLR would that they may be accelerating faster now but their ultimate market size is not that great, or that they will wreck along the way. I have no reason to think either right now. Since you own CSIQ and STP you probably agree that solar is potentially a multi-trillion dollar market. I have instructed my friends to refer to me as the "Solar Baron" in the style of the old Oil Barons if this should occur. $25B market cap is a drop in the bucket.