Jack Yetiv

Why Canadian Solar is the Best Solar Stock

A few responses to AckerAnalytics:

1) I acknowledged the potential "error" in using forward PE, but that error applies to all of thes companies. Surely, in coming up with their 2008 estimates--which I averaged in order to minimize the erro--the analysts are aware of what you are saying above, and yet they are still collectively estimating $1.63.

2) Here are CSIQ's revenues in the first 3 quarters of 2007 (all in millions): 17, 60, and 97. Projections for the fourth quarter are about 110-120 million, which seems believable given the first three quarters. CSIQ has guided to 650-750 million in 2008, and analyst Adam Hinckley thinks this guidance is conservative. These numbers certainly seem to dispute your argument that CSIQ has failed to execute.

3) AS to its supposed lack of capitalization--CSIQ's LT debt is only 8% of equity, and it appears well enough capitalized to go from $290 million in sales in 2007 to $650 million (low end of guidance for 2008). Which other solar company is going to grow faster in 2008, and what is your basis for saying so?

4) As to silicon sourcing, here is a direct quote from the third quarter earnings report: "The company believes that it has contractually secured 90% of its silicon or cell requirements to support module production of 200-220 MW in 2008. The company continues to evaluate new technologies, including the use of metallurgical silicon (UMG) products, which, if successful, would have the potential to increase total shipments by 30-40 MW in 2008." 35 MW should translate to an extra $120 million in sales.

5) Finally, you don't say which company you prefer, and why. That would be truly much more helpful than simply criticizing CSIQ without reference to any data we can look at.

Jack Yetiv