Atticvs Research

19 Comments

    • ON: Mon Sep 8th 12:15 PM
      Commented on:
      Lower Your Solar Electricity Costs with First Solar
      Michael,

      First Solar does not do the residential market at all.

      They only do big commercial systems where the relatively high labor cost of setting up the panels etc is allocated over a large number of panels and thus the overall installed system cost for the customer, on a per watt basis, is compellingly low.... sometimes so low that even without any subsidies the installed system may be capable of achieving grid parity.
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    • ON: Fri Aug 8th 12:47 PM
      Commented on:
      Further Thoughts on Trina Solar and the Solar Space
      Time to sell was when it was $40, now is good time to buy ahead of strong earnings. Given jittery market overall it will be late next week before the pre-earnings run begins in earnest.
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    • ON: Thu Jul 3rd 12:52 PM
      Commented on:
      Further Thoughts on Trina Solar and the Solar Space
      Bentinger, for what it's worth I agree with GS concerning the dangers of investing in many solar companies long-term. This will be a volatile game and significant dangers are now emerging. See above post re Europe and competitive landscape developing in Europe. However, I also think that most of the solar plays right now, including TSL at $28, are potentially excellent short-term trades.
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    • ON: Thu Jul 3rd 12:45 PM
      Commented on:
      Further Thoughts on Trina Solar and the Solar Space
      Anyone here got a copy of, or link to, TSL's development road-map? I've them for FSLR and SPWR and make interesting reads. FSLR expects to be able to sell with ASP's of $1.00 in a few years time. Currently their total cost per watt is just over $1.00 and should break below this threshold in Q3'08. I know, not apples to apples but costs do matter...

      Given the solar support cut-backs in Spain and the general economic slowdown across Europe, not to mention the huge expansion plans that most solar companies have embarked upon, I think in the next couple of years it will be very important for solar companies to have strong balance sheets and very competitive technology. Whilst I consider TSL to be potentially excellent short-term trade right now at $28, a medium or longer term investment decision for me would have to incorporate information with regard to their road-map (and of course significant efforts to strengthen their balance sheet).

      Appreciate if anyone can give me a link to TSL's road map, or perhaps some on-line investors presentation where I may access the main details. thks.
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    • ON: Thu Jul 3rd 11:23 AM
      Commented on:
      The 'Problem' With Solar Companies is Not Really a Problem
      Dicki, you say TSL should reach grid parity in 2010. Currently their production cost per watt is about $2.60 all inclusive and are forecast to be about $2.50 by end 2008 or early 2009. What do you forecast their total cost per watt will be in 2010? Do you have any TSL road-map reference you can post here. I understand the thin-film companies may have total costs per watt of about 80 cents by 2010 with ASP's of about $1.20 per watt. I know they are not oranges to oranges but for large installations where labor & installation costs can be spread pretty thinly costs per watt & ASP per watt do matter. I'm leaning toward the belief that if solar companies cannot get ASPs towards grid-parity - i.e. in region of say $1.50/$2.50 per watt (depending on output per panel etc) in the next few years - then they may find the going tough against more competitive offerings.
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    • ON: Mon Jun 16th 16:13 PM
      Commented on:
      Further Thoughts on Trina Solar and the Solar Space
      Jack, disageee on both counts.

      You cannot logically have a dump of silicon on the market that lowers silicon input prices that doesn't lower selling prices for companies such as TSL. They are two side to the same equation give or take a short period.

      Also, forgive me pointing this out but it is inconsistent to speak of giving conservative estimates on the one hand whilst on the other hand choosing to ignore the dilutive effect of an equity or equity related debt offering that has been already discussed by management.

      I agree that TSL may be a buy, very probably is, but the thrust with my questions is to get to clean information not guess what may occur if and when management occasionally spin positive events as no doubt they and all other do from time to time. I'm striving to look beyond that. Surely the main purpose of good research and exchanges of data is to get beyond spin and look at best underlying information. An equity offering, or equity related offering, is more than probable for TSL. Seeing a you consider this major event to be a probablility why have you excluded it from 'conservative' EPS calculations in what was a long discourse about prospects and earnings for TSL. I feel I will probably buy TSL, but not until I get a better feel for their true prospects and EPS.

      Best.
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    • ON: Mon Jun 16th 08:26 AM
      Commented on:
      Further Thoughts on Trina Solar and the Solar Space
      Jack, there’s a lot of silicon coming onto the market and I understand that this is part of the reason why silicon pricing is forecast to drop going forward. It seems to me that with such a lot of extra product hitting the market that selling prices across the board for solar companies are in danger of softening as we get into 2009 and a growing awareness of this should act as a headwind for most solar stocks in later 2008.

      Second, TSL management, during the Q1 earnings conf call, spoke about their 2008 and 2009 capex plans being $250-300 million and that ‘when the time is right’ they would seek to fund this via equity or equity related financing. This too is likely, until it is concluded, to act as a headwind for the stock price – especially because that the dilution effect is likely to be fairly large given the relatively small size of TSL’s shareholders equity and balance sheet. Additionally, seeing as such funding should ideally have to occur before the end of 2008, it would seem prudent to incorporate some dilution effect into EPS projections for latter part/s of 2008.

      Keep up the good work.
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    • ON: Tue Jun 10th 10:45 AM
      Commented on:
      What's Behind the U-Turn in Oil Prices?
      Jim,
      What is the total value of contracts traded on NYMEX daily?
      What is the daily total value of physical oil shipments globally?

      I'm heaing a lot of talk recently saying that NYMEX is amplifying oil price moves up and down because its total contract values are comparatively small. Hence, whether the money flowing into NYMEX is for genuine hedging purposes or for pure investment/speculative purposes, if total daily NYMEX contract values are indeed relativley small, this might help explain why NYMEX oil prices are not as apparently rationale as many pundits have expected.
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    • ON: Tue May 20th 11:23 AM
      Commented on:
      China North East Petroleum: Strong Growth, Clear Visibility
      Larrry, the 2.5m figure in SEC filings is Proven Reserves, whereas the 75 million number is total oil reserves. The Proven figures will rise strongly as they drill lots more wells over the next couple of years. See further explanation relating to Proven, Probable and Possible oil reserves above dtd May 7, 9.15am.
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    • ON: Wed May 7th 09:15 AM
      Commented on:
      China North East Petroleum: Strong Growth, Clear Visibility
      My understanding: Oil reserves are broken into three categories; (P1) Proven, (P2) Proven & Probable, and (P3) Proven, Probable and Possible.

      P1 at December 2007 was 2.5m bbls.

      P2 has not been published but would represent the estimated amount of recoverable oil in the four combined oil fields. This figure should be about 35% of the total oil reserves of 75m bbls, less the approx 40% output that belongs to PetroChina in the remaining years of the leases. Net-net this works out at about 16m bbls.

      P3 is 75m bbls.

      Over the next few years, as CNEH rolls out its drilling program, we can expect P1 to increase towards the P2 figure of about 16m bbls.

      Should CNEH be successful at implementing CO2 technology, that would increase the recoverable percentage by about 20% to say 55% of total reserves, which in turn would boost Proven & Possible (P2) to about 25m bbls, and Proven reserves (P1) would then, in time, graduate towards this higher figure.
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    • ON: Fri Feb 22nd 08:47 AM
      Commented on:
      Smallcap Materials Pick: PolyMet Mining
      I've taken a stab at my own valuation. Valuing 182mt Provable & Probable reserves and 422mt Reserves plus a further 121mt of possible Reserves (might or might not be economical, I don't know) all using near-current mineral selling prices I get a total of $28bn. An acquirer might buy this using an assumed Net Income figure of 15% working off profits spread over 20 years of production and then apply a 10% npv factor, this being; 15% = $4.2bn and npv = about $2bn.

      PLM anticipated in 2007 that the mine would require up-front capex & additional infrastructure of $350m in order to get the project up & running. That was at 2007 prices. And just as I used near-current sales prices for valuing the underlying reserves of PLM we must also adjust upwards this $350m to reflect commodity price increased (iron & steel etc) betwen 2007 and 2009 when they expect to incur that capex, thus a capex figure of $500m is more correct. The company had assued in 2007 that it could fund this capex by bank borrowings. Given credit market tightness in 2008 I think the best case now is that this $500m would be funded via convertible debt using a 5/4 ratio, i.e. equivalent to $400m fully diluted shares in current money.

      Thus the fully diluted equity in present terms becomes ~160m shares that already exist plus approx 140m new (convertibles) shares equivalent to fund the $500m capex = total 300m shares fully diluted.

      Dividing the $2bn Net Income NPV above by 300m shares gives a potential buy-out valuation for PLM of about $6.66 per share. It would be higher if the company can fund the $500m capex using more debt. On the other hand the approvals are not yet in place....

      All in all this gives a much more sober picture than I had hoped to uncover and my maximum upside of $6.66 is a long way short of the potential mentioned in Greg's article above. We all like to uncover investments with hidden potential and I'd welcome any further insights people may have, especially if I've omitted something important.
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    • ON: Thu Feb 21st 08:47 AM
      Commented on:
      Smallcap Materials Pick: PolyMet Mining
      "3-22 times upside in long-term".

      PLM has 157m fully diluted shares. At the current stock price of $2.73 that's a market value of $428m. 3x = $1.285bn and 22x = $9.4bn. These are big numbers. If possible pls explain how you get these valuation parameters.
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    • ON: Fri Feb 15th 12:34 PM
      Commented on:
      China: New Lending, Money Supply Soars in January
      Michael, I believe this January effect is a direct result of the Govt freeze on new lending for the remainder of 2007 which they instigated in October. Thus there was heavy pent-up demand for new loans from the last few months of 2007.
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    • ON: Fri Feb 15th 05:18 AM
      Commented on:
      The Long Case for China North East Petroleum
      Where to oil prices the next 5 years?

      Summary article on Seeking Alpha:

      seekingalpha.com/artic...
      static.seekingalpha.co...
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    • ON: Mon Feb 11th 11:46 AM
      Commented on:
      The Long Case for China North East Petroleum
      Don't know jrs. I did see the stock run to $4.55 but I didn't buy because; with so little known about the company's prospects, with so little information available in the public domain at that time, with such a short track record of delivering good quarterly results (Q2 which was just published, was then the only set of decent results), with no mention of their multi-year drilling program, and without having renegotiated the extended well-drilling payment terms with PetroChina - against all this it didn't look like a good risk-reward to me back then. Additionally, from the daily volume of shares traded it seemed to me that daytraders were piling in and would probably disappear just as quickly as they had arrived, and they did.

      Since then the CNEH picture has changed a great deal for the better. As good information is made available and excellent financial results are reported during 2008 there is every reason to believe that the stock price will evidence a strong up-slope during the year with some peaks and troughs along the way. It's a very cheap stock.
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