Raymond James Analyst: Timminco Could Get Short-Term Boost from Q1 Results

Timminco Ltd. (TIMNF.PK) shares could get a temporary boost when the company reports first quarter results after market close on Thursday, but don't expect the upward trend to continue, says Raymond James analyst Andy Nasr.

Mr. Nasr told clients in a note that consensus revenue estimates of C$47-million are too low, given that Timminco recently noted that the average solar grade silicon prices exceeded C$60 per kilogram in the first quarter, implying revenues closer to C$49-million.

He wrote:

Based on our understanding, the company is realizing high solar grade silicon prices by delivering on short-term purchase orders and capitalizing on the strength in the spot market.

If true, and production costs are contained, Mr. Nasr said the stock "should trend higher." At noon on Wednesday, Timminco shares were up 7% or C$1.59 to C$23.75.

The analyst said he will revisit his estimates after the earnings call, likely with an upward bias for 2008. However, long term he remains concerned about silicon prices and the level of execution risk at the company.

He wrote:

We would become more constructive on our outlook if the company can control its throughput and production costs by year-end.

Nonetheless, we continue to believe that the market will be oversupplied by 2010 and place downward pressure on long-term solar grade silicon prices.

Mr. Nasr maintained his "underperform" rating and left his C$15 price target unchanged.

Comments

[Piggybank:]

Timminco had a drop recently on some analysts talking it down due to not believing in timminco's recycling abilety. Bought them around that 20$ level then after Q-cells backed up timminco. I have a lot of confidence in Q-cells, hold a fair position and think it's a great company. Well Q-cells is the world's largest solar cell producer, and i often compare Q-cells as the Intel of Solar in this regard as the cell is the core of a solar pannel and it's there where effeciancy will need to be inproved, if you get my point in the grand scheme of thing's.

Anyway i sold my shares near 21$ with a small gain because i wanted to move on to more interresting investments. Could as well have held it. No regret though the stocks i moved on to did just as well, did great on Vestas wind earnings today for one with a large position.

Company still has a net loss but seems to be improving on that. Company has a 2.6 billion $ market cap though, so it will need a fair share of profits to make this valuation sensible.

Planning earnings plays on Q-cells on 14th may and gamesa on 15th may. Going to put more in Gamesa though as i usually put more in wind, ind turbine's are in high demand, turbine manufacturers can't keep up so prices are rising and so are the turbine manufacturers profits. Vestas said today it ses shortage's for years with turbine's even with expanding production, so all my turbine manufacturers were well up today.

Anyway, back to timminco. I don't see it as a bad stock however risky due to it's valuation. Not sure on the outlook of polysilicon prices in the future neither. Not one of the stocks that ill trade regullary in.

2008 May 08 05:08 PM

[aquaculture:]

I urge investors to be extremely cautious with Timminco.
For several reasons:

1 the resume of the ceo of (AMS:AMG) and (TSX:TIM) does not look great (eg nearly bankrupting Metallgesellschaft AG with enormous speculative losses of some 2.5 billion $ - in todays $.

2 Silicon wafers today, account for up to 50 % of the cost of conventional solar panels. If what Timminco states is true -that they have a modular 1200 ton solar grade (99.99999 % pure) production line wich can be easily expanded, the world could be flooded with low cost wafers (about 4 x as cheap as the lowest cost Chinese production).
Together with the abundance of low cost labour this would solve the worlds energy problems.
Companies wich make such claims make me suspicious.

3 No patents have been granted. No independent engineering consulting firm has been allowed to verify Timminco's claims. The fact that PHOTON consulting has, tells me nothing: they are not engineers.

4. Sending out samples to potential customers tells me nothing. Are the samples really from Timminco's production line?

5. One cannot short the stock.

6. If Safeguard insiders knew they had such a revolutionary production line in their hands then why have they chosen the clever (AMS:AMG) exit strategy, cashing out.

$CLINK** $CLINK** $CLINK**

2008 May 09 10:59 AM