Seeking Alpha

SolarCity +2.7% premarket as Baird calls top pick, raises target to $81

  • SolarCity (SCTY) +2.7% premarket as Baird analyst Ben Kallo calls it his favorite pick for 2014 and would be a buyer of the stock on any weakness from the Jan. 14 lock-up expiration of ~51M shares.
  • Kallo says SCTY is levered to the rapidly growing U.S. residential and commercial solar markets, as he raises the stock's price target to $81 from $71.
  • Kallo thinks SCTY is on track to meets its 2014 guidance of 475 MW-525 MW after its recent expansion of 10 operating centers in northern California.
  • In North America, the firm believes the residential and commercial solar markets will grow ~20% and 13.8% Y/Y, respectively, as demand accelerates.
Comments (8)
  • just for comment
    , contributor
    Comments (30) | Send Message
     
    haha where is that CDM CAPITAL guy hiding now, sea turtle!!!
    his top pick for 2014 short was SCTY! everytime scty has correction he started spamming on twitter and here!!
    now in hiding, deep hibernation!
    9 Jan 2014, 07:54 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (5666) | Send Message
     
    If the overall markets are acting crazy, the best fundamental valuation can be wrong in the short-term. I found (and still find) his SCTY valuation/article sound and interesting.

     

    That said, I wouldn't short the stock because of its "momo" characteristics and long timeframes:

     

    I think no one can foresee the valuation of SCTY given the 20-30 year lease timeline, shot-term the subsidies move the stock also, these subsidies are at the will of political players.

     

    SCTY is a very hard stock to value for any outsider - it's more a single-purpose solar bank/leasing company and not a solar sector company.

     

    PS: If an analyst recommends a stock for 2014 that was up over 300% last year one was to wonder why he didn't pick it in late 2012 already?
    9 Jan 2014, 11:27 AM Reply Like
  • CDM Capital
    , contributor
    Comments (437) | Send Message
     
    We are right here, still short, just for comment.

     

    The business is still flawed and with the massive amount of shares being unlocked next week things may get interesting again.

     

    Everything we said progressed even worse than we thought on the earnings call. Maybe you should listen to the CC, it is very telling. Was down double digit % after the release, we covered some... Now adding small amounts of shorts here, this has never been higher than a couple percent in our portfolio and never will.

     

    Thanks for all the kind words.
    10 Jan 2014, 02:07 PM Reply Like
  • thinkequity
    , contributor
    Comments (3) | Send Message
     
    Just read the reviews on Yelp. Business 101 for long term investors (not day traders): always listen to your customers. Nobody should buy before a 51,000,000 share lock up expiration. That is going to put some much pressure on the stock this will crash and burn.
    9 Jan 2014, 08:19 AM Reply Like
  • niboryak
    , contributor
    Comments (114) | Send Message
     
    ***** WRONG: == Back in '97-'00, I ALWAYS bought pre-lockup expirations for the biggest bounces and best action of before & after daytrading activity on these things. They NEED high prices to sell. DUH. Over and over for 3-years this made my fortune which i mostly kept until that horrible day in Sept '00 post- labour day holiday crash which took me for 20% in one day and made me give up on Nasdaq for 11-years. I'm 71 now and 50-years of trading later. You guys should be so lucky.
    9 Jan 2014, 09:09 AM Reply Like
  • Curt Renz
    , contributor
    Comments (228) | Send Message
     
    What is this about a lock-up expiration next week? I thought that occurred last June.
    9 Jan 2014, 10:43 AM Reply Like
  • Johann Galt
    , contributor
    Comments (240) | Send Message
     
    What will the effect of rising interest rates and/or inflation be on this stock? Just wonderin'.
    9 Jan 2014, 12:24 PM Reply Like
  • CDM Capital
    , contributor
    Comments (437) | Send Message
     
    Yes Johann,

     

    One has to wonder if Goldman is calling SolarCity a "utility", then why wouldn't the business get hurt with higher rates on a very capital intensive business. We think SCTY is just trading on pure speculation here, would not be surprised with any significant declines going forward.
    10 Jan 2014, 02:10 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs