Seeking Alpha

First Solar surges amid Icahn rumors, peers also rallying

  • Rumors Carl Icahn is set to disclose a stake in First Solar (FSLR +7.9%) have helped shares fly higher. Similar rumors popped up back in April.
  • Several solar peers are also doing very well on what's proving a good day for momentum stocks. SPWR +4.9%. SUNE +5%. SCTY +7.5%. DQ +14.3%. CSIQ +4.8%.
  • JinkoSolar (JKS +2.7%) is up more moderately after announcing a deal to develop a 120MW Chinese solar plant that will be built over the next three years. Shares jumped yesterday in response to a Credit Suisse upgrade.
  • The Guggenheim Solar ETF (TAN +1.9%) is now up 152% YTD.
Comments (40)
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Just a couple of anecdotes, people may laugh but one thing mbkelly taught me with dividend stocks is, if you are encountering something in your daily life, chances are it makes a good investment.

     

    Okay 2 points:

     

    1) Here in Southern California I am seeing solar cells popping up EVERYWHERE

     

    2) There is a peer to peer service called Mosaic where you can invest in solar projects and returns are about 5-7%

     

    So you have the combination of all these little spot solutions plus the bigger farms like the plant mentioned above. This is starting to feel like an investment bubble in progress but with a lot more room to run. Reminds me a lot of housing spring 2012.
    18 Oct 2013, 02:35 PM Reply Like
  • Walter P. Chrysler
    , contributor
    Comments (300) | Send Message
     
    My understanding is that a lot of businesses as well as the Government itself is starting to "cut the cord." These are extraordinary moves obviously...Solar City is up almost 50% in a week. Nissan normally announces upgrades to its Leaf (all electric car) in the Spring...and this year's was a pretty spectacular upgrade...along with a lower price i might add. It is possible that grid power can become so cheap it might have to be nationalized actually. Big fan of Entergy still..."takes energy to make energy" and they're very well positioned to do just that.
    18 Oct 2013, 04:33 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8157) | Send Message
     
    I was one of the biggest bears on solar until last spring when I realized I couldn't go a day without seeing massive solar installations popping up where I live.

     

    I did some further investigating and realized that solar 2013 is far different from solar 1997.

     

    I just wished I could have hopped on this rocket ship a few months earlier...like during the 4th quarter 2012.

     

    Oh well...the last few quarters have been VERY good for my portfolio regarding solar.
    18 Oct 2013, 03:31 PM Reply Like
  • tiger8896
    , contributor
    Comments (577) | Send Message
     
    One guy tweets that Icahn is interested in FSLR and the stock is up 8%, unbelievable. The age of the internet you got to love it.
    18 Oct 2013, 04:57 PM Reply Like
  • xamd
    , contributor
    Comments (397) | Send Message
     
    Deep Value,
    It is wonderful to read your positive comments about solar. No disrespect, its your opinion, but I recall reading your opinion on some other stocks and I think there was more contempt in your comments. It makes me happy to see you give the thumbs up for solar. 2013 IS quite different from 1997, lol. Good to hear you got money in solar and that you are pleased with it. That's important. That's progress also.
    Nice weekend.
    18 Oct 2013, 05:20 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5366) | Send Message
     
    Long (SPWR). Wondering if I should invest in (FSLR), or is it too similar? Maybe (SCTY) or (RSOL).
    18 Oct 2013, 05:52 PM Reply Like
  • Ray1962
    , contributor
    Comment (1) | Send Message
     
    FSLR is utility, SPWR is both, but a smaller startup
    19 Oct 2013, 08:46 AM Reply Like
  • xamd
    , contributor
    Comments (397) | Send Message
     
    Michael Bryant,
    you just missed your chance to invest in RSOL. It was hanging in the two dollars upper range and then suddenly this last week in one day fooooooom... 50 per cent increase. And it wasnt because Andy Zelanak wrote an article about it this time either. Its gone back down into the upper 3s. If it goes back under 3, buy a couple thousand shares. Its probably a similar company to SCTY but RSOL has like 1.5 per cent of that market and SCTY has 17.5 per cent. But SCTY is hitting 60 and RSOL is 3 and a half. It doesnt even help to check their fundamentals because solars are so volatile now and SCTY is going crazy with buying stuff that they must be setting themselves up for something big. But you better wait for some lower point for either. Solars are on a role right now.
    19 Oct 2013, 08:44 AM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Here's how the math works out for me on Solar:

     

    I installed a $29K Sunpower system on my roof 3 years ago. Before that, my electric bill was ~ $4200/year. My bill last year was $12.04, that's for the entire year! The year before that, I received $85 back from Edison! So for all intents and purposes, my electric bill is now effectively $0. That puts payback for the system at less than 7 years. System is guaranteed at 85% efficiency for 25 years. Not even adjusting for Edison rate increases and inflation: 18 years at $4200/year savings = $75,600.

     

    I was so blown away by my personal experience with SunPower and the ROI of my system, I bought 2000 shares of SPWR in 2010 @ ~ $13/share. I then sold all 2000 shares to Total SA when they purchased 60% of SPWR in 2011 at $23/share, a $20K net profit.

     

    I then watched SPWR go down below $4, where I bought 7000 shares at $3.88. It closed today at $33.57, that's a potential profit of $207,830. If I sold all my shares today and remain in my house until retirement, my Sunpower profit would be $303,430.

     

    For the life of me, I can't understand why anyone would have a problem with solar energy. It's completely silent, non-polluting, most of the time I don't even know it's there. The analogy I like to use is that its no different than catching free money falling from the sky every minute of every day.

     

    With regards to growth, ultimately every rooftop and every under utilized piece of land on this planet is potentially a revenue producing power plant. What's not to like?
    19 Oct 2013, 10:11 AM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Great job, my friend is also going with a system like yours and will be selling power back to Edison as well

     

    I am seeing them in parking lots, little spot solutions on the sides of the road, and on houses

     

    It makes huge sense for those in the desert with plenty of sunlight and high power bills due to air conditioning costs
    19 Oct 2013, 12:52 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8157) | Send Message
     
    Imagine the cash generation from the sun if you lived in a Big Sun state like Nevada or New Mexico!
    19 Oct 2013, 02:50 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    I agree, and don't see why both of those places could not be 100% solar powered, with the tremendous amount of available sunlight, and the high air conditioning usage.

     

    The Southwest has a tremendous untapped potential both through PV and solar thermal

     

    Solar makes the most sense during the day when A/C usage is high and the sun is providing the energy. It becomes more difficult at night due to battery restrictions.

     

    Hopefully battery technology will catchup and make nighttime usage more efficient over time
    19 Oct 2013, 03:55 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1558) | Send Message
     
    Glider, what state do you live in??

     

    Amazing SPWR investment btw. Wow. The stock completely slipped my radar....10x return in under a year. Out of curiosity, what made you get back in when it was < $4?
    20 Oct 2013, 11:15 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    I've also been seeing a lot of public schools here in southern California erecting solar roofs over their parking lots, a very wise secondary use of under utilized space...
    21 Oct 2013, 02:27 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Derek, I agree with you 100% and see battery technology as a great investment opportunity also, incredible growth industry.
    21 Oct 2013, 02:27 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    I live in California, Los Angeles County. I bought back in below $4 because I firmly believe in solar technology and SunPower as a company. The stock price was also at an all time low. The thought that kept going through my head before I bought back in was: why would Total SA buy 60% of Sunpower at $23 per share if the stock was only worth $4. Total SA must have done it's due diligence before committing that kind of money. The obvious answer was, the stock is worth far more than $4/share, in terms of future growth potential, it was severely undervalued. So I jumped back in with both feet and hoped my hunch was correct. Also, I didn't worry too much about the daily price fluctuations because this is a long term investment for me, IRA, 15 years until retirement.
    21 Oct 2013, 02:27 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1558) | Send Message
     
    Glider, any battery companies on your mind?
    21 Oct 2013, 02:42 PM Reply Like
  • yukoff
    , contributor
    Comments (7) | Send Message
     
    Solar is great...if you can afford it. $30k is a big expense for many, many folks.
    22 Oct 2013, 02:23 AM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    @idkmybffjill - JCI Johnson Controls. It's down over 4% today, might be a good time to start buying in.
    3 Feb, 03:07 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1558) | Send Message
     
    Glider, I was not aware that JCI did batteries?? Hmm...
    3 Feb, 04:14 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Yes, according to their website, they're "the world's leading supplier of advanced automotive batteries and energy storage systems". 1.79% dividend yield, decent LTG, diversified business model...
    19 Feb, 04:51 PM Reply Like
  • xamd
    , contributor
    Comments (397) | Send Message
     
    Holy s... glider pilot, that is some story. I too sold half my SPWR stock to Total when they did the buyout, from 14 to 23 profit, but didnt have as much stock as you. Then i really wanted to buy it when it was around 4 but i didnt have the money and I was scared because all the solars were doing badly and they said a lot of them would go out of business because there was so much competition and there was a glut from the Chinese. I still had half left from not selling to Total and have since bought more, but in the 20s. Man I kick myself for not even buying a couple hundred when it was at 4 last year.

     

    But your story about your solar roof is what is incredible. 4200 usd down to zero or even cash back!!!! That is A-mazing. You really got to get that story out to everybody. Everybody should know what is possible with solar, its a win for everybody (except maybe for the big grid companies). And its not even necessary to be in a big sunshine state. Man, Im going to keep your post in my archive so when I see some negative creep talk about "the eyesore" of solar or solar power is a myth because it wouldnt survive without subsidies, Im going to send them your story. Thanks for sharing. I am really blown away.
    20 Oct 2013, 04:48 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    There's a lot of political nonsense and ideology surrounding solar and other alternative energy technology. People allow their political and religious beliefs to blind them to the possibility that alternative energy might just be the next great revolution for humankind, not unlike the industrial age or the space age or the computer revolution we went through decades ago.

     

    It doesn't help either when political candidates constantly beat the Solyndra drum and deny climate change, i.e. science. I've even had deeply religious friends of mine tell me that it doesn't really matter whether or not we try to stop climate change because their pastors are teaching them that Jesus will return soon and basically fire bomb our planet. How do you even begin to respond to that?

     

    I heavily invested in alternative energy because I somehow had the good sense to install a PV system for my home, and that happened back in 2010 after I received my July electric bill, $650! That was it for me, I decided right then, never again. Why keep $29K sitting in a savings account drawing 0.25% interest when I could invest it in my home, a PV system and after 7 years have free electricity. That's when and how I realized the true potential of this technology. For me, it was all about ROI.

     

    All that being said, my alt energy stock investments haven't all been good ones. I lost over $4K in STP, my mistake there was forgetting to buy "quality" companies. I'm also currently down more than 46% in WPRT but am holding because I think there's still some growth potenial there. I've done OK however with FSLR, FAN, GEX, GTAT and NRG.
    21 Oct 2013, 04:33 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    xamd, value investing is like that Seinfeld episode where George became "opposite guy", he basically did everything opposite of what he would normally do and it worked out great for him, at least for a while :-)

     

    My point is; when you are looking for value in a company, you're most likely going to find it when everyone else is running scared from that sector or the markets in general. That's when you get the best opportunity to buy the best companies at their lowest prices. Take 2008 for example, the great US financial crisis, looking back now, almost everything was on sale! Or all the worry over problems with the EU and Greece for example = good, solid, high quality companies on sale.
    21 Oct 2013, 04:35 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    I strongly agree with you xamd, solar is truly an amazing technology and anyone who is willing to put there biases aside can reap great financial benefits by installing a PV system. Like I said before, it's not unlike catching free money falling from the sky, you just have to have the proper catcher's mit.

     

    FYI: Southern California Edison recently raised their rates in my area by 9%! On average, they have been raising their rates by 6% per year!
    21 Oct 2013, 04:35 PM Reply Like
  • nickysg
    , contributor
    Comments (489) | Send Message
     
    Always a bit wary of people on this site who boast about how much money they have made previously on a stock-anyone can claim that,it might be more elucidating to know what they are investing in now!
    Saying that,I've been investing in solar for a while as I think its long-term future is bright.However,politics could determine its near-term future.The Republican Party is strongly financed by the "dirty" energy industries,and conversely solar is aided by Gvt assistance,so who wins the White House in 2016 could have a major effect short-term.
    20 Oct 2013, 11:34 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8157) | Send Message
     
    Clinton will win easily.

     

    No democrat dare challenge her and the GOP is thoroughly hated after the shutdown so she'll go back to the White House in the biggest landslide since Reagan '84,
    21 Oct 2013, 08:17 AM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Why is my story so hard to believe? I merely put my personal experience with a product and company to work in the market.

     

    With regards to what I'm buying now; nothing. I have some cash sitting on the side lines but this bull market has been on such a tear it's difficult for me to justify buying anything right now.

     

    One avenue I've been considering is to invest in some companies that have been taking a beating lately, such as REITs. I think there may be some value to be found there with the likes of IVR, NLY or AGNC.

     

    To answer your question directly, my most recent purchases are:

     

    GTAT on 7/8/13 @ $4.17
    PSEC on 3/6/13 @ $11.10
    FAN on 7/9/13 @ $8.62
    TOT on 7/9/13 @ $48.98
    21 Oct 2013, 04:34 PM Reply Like
  • xamd
    , contributor
    Comments (397) | Send Message
     
    nicky,
    I ll half agree with you. Sure subsidies are/will play a part in solar (but compared to the subsidies oil STILL gets, its a drop in the bucket), but on the other hand, the solar industry is here to stay and I can only see it getting bigger. The problem IS and WILL BE the strength of the oil lobby and dirty energy. Even how they can manipulate public opinion is pretty incredible. But you are right when you consider things like that rule in California Jerry Brown just changed that homeowners or third parties dont have to be capped at 5 per cent of their energy meter. Hope you know what I am referring to. So yes, for years they were trying to get that changed. Arnold Schwarzenegger tried in like 2004 to get it changed but the grid electric companies blocked him, so im told. But lets just say that conversely the strength of solar and alternative energy will also grow and can maybe push the others back. Politics is always a matter of one interest group vs another and who supports them.
    21 Oct 2013, 04:46 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    I was reading up on "minigrids" today. Imagine a whole neighborhood and a shared battery pack being able to pool excess energy.

     

    http://1.usa.gov/1eGRaxq

     

    This decentralization movement is the exact opposite of the "cloud" solution in IT.

     

    I think in the end we will have a hybrid of big power plants supplemented by local sources, just like in IT, for a flexible portfolio of solutions, not just one size fits all.
    22 Oct 2013, 02:02 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Derek, thanks for the link on minigrids, first I've heard of it, very interesting concept. I'm also very intrigued by solid oxide fuel cell technology, e.g. Bloom energy. I wonder if they're planning to go public anytime soon...
    23 Oct 2013, 03:55 AM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Oh yeah the Bloom Box ! It's been a few years since I have looked at them. Think I was thinking the same thing, that a Bloom Box coupled with solar is a solid plug and play solution.
    23 Oct 2013, 02:13 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Still very pricey though. I read somewhere that a 100kw Bloom energy box can cost as much as $700K, ouch! It's still only priced for the Googles and Apples of the world but just like every other piece of technology, the price will come down over time.
    24 Oct 2013, 09:24 PM Reply Like
  • xamd
    , contributor
    Comments (397) | Send Message
     
    Yukoff, I beg to disagree about your comment, solar is nice if you can afford the 30 k which most people cant. You dont have to look further than Solar City (SCTY) which is giving you the system either for lease or, dont quote me on this one, Im not sure if I still understand their program, but for nothing if you give them the excess power you make from the roof and THEY sell it back to the grid. I apologize, i should understand their system much better. At any rate, several companies are doing the leasing somewhere in the US. RSOL is also selling solar products. I think these days there are many opportunities to get into PV, solar roofing. Please check it out if you are serious. I dont think it will be 30 k at all.

     

    Glider, you are right of course about the "opposite guy" theory. But you need a) enough cash to be able to risk losing it and b)nerves of steel to get into it when everyone is running away from it. Kind of like the photographer who runs TOWARD the twin towers falling. But of course its one of Buffets rules: buy during the fear and sell during the greed, or something like that.
    22 Oct 2013, 05:16 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Sunpower also offers a zero down lease option like Solar City. My neighbor and brother-in-law went that route rather than purchasing. My brother-in-law was paying ~$6500/year for electricity before solar, his solar lease payment is now $250/month and the system reduced his electric bill to $600/year total, that's a net savings of $3000/year. The drawback of the lease option however is that it's 20 year term and if you ever decide to sell your house you must convince a prospective buyer to pick up the lease. Also, by the end of the lease, you end up paying much more for the system.
    23 Oct 2013, 03:55 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1558) | Send Message
     
    $6500 a year in electricity? Wow. Do you guys live in mansions? lol. I can't imagine $500/month. Maybe it's California prices...
    23 Oct 2013, 09:32 AM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Mansions, haha I wish, LOL. Yes, rates are pretty high here in socal but it's more to do with the fact that we basically live in a desert climate. In the summer it can get well above 100 degrees here, for weeks at a time. In that type of climate, solar makes a ton of sense. Other regions of the world, maybe not as much...
    24 Oct 2013, 09:21 PM Reply Like
  • GliderPilot
    , contributor
    Comments (15) | Send Message
     
    Another point; if you use less electricity, your PV system would be smaller and less expensive, it's completely scalable. With solar, you're reinvesting in your home rather than paying the electric company forever, you're paying yourself, not them. And you're fixing your electricity rates for the life of your system, 25 years or longer!
    24 Oct 2013, 10:38 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1558) | Send Message
     
    Which part of SoCal gets up to a 100?!! I assume you don't live in San Diego or Orange County lol….are you sure you live in California and not my home state of Texas? haha
    25 Oct 2013, 12:15 AM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    OC and LA stay pretty moderate but once you get away from the coast, out in the desert about an hour east, it's in high desert. The Inland Empire and Riverside areas get extremely hot and there has been a tremendous amount of building there over the past decade. It's similar to Las Vegas climate basically.

     

    Buyers can typically get a much larger house there at a much lower cost with more land, tradeoff being the heat (along with cooling costs) and commute time if they work close to the coast.

     

    Seems like the ideal situation for solar considering the high electricity usage is when the sun is at its peak hours.

     

    On a side not the 3 solar thermal towers on the way into Vegas are quite impressive (unless those are something totally different).
    25 Oct 2013, 02:24 AM Reply Like
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