solar jim

Senate May Kill Solar Rally

FSLR is already looking at nonsubsidized markets that they can compete in right now and make a profit. While the tax credit would help expand business and scale at a faster pace it will happen nonetheless although at a slower pace to grid parity if it does not pass. The U.S. isn't the only market either. The other markets in the world as well as individual states (ie CA) have enough incentives in place for enough years under already passed law to allow at least a couple of the solar players to expand capacity and the market to a size that they can compete without any subsidy anywhere in by 2011-2012, if not sooner. And that's without considering the passage of some sort of tax on carbon making all current cheap energy not cheap anymore with a future McCain/Obama/Clinton administration as they all are on the global warming bus together.

Is Energy Conversion Devices Ready for a Comeback?

Regarding meursault's post and the new patent that was filed...

At first, like many things, I thought 'yeah right, here's someone pumping up so they can dump later'...

Went to the USPTO site and checked it out. While it has only been filed and the actual implementation of this tech/machine may take a few years to work out the kinks, I have to admit this sounds very interesting. They claim to be able to use a plasma deposition process instead of the current process that will enable an increase in the run rate per machine/line from the current rate of about 30Mw per line to Gw's per line in the same space due to increased throughput rates from new deposition process. If actually true then this is big. Really big. The question is how long it takes to actually implement. Now I wonder if the reconfiguration of their plant has anything to do with this machine/process, or if its just normal optimazation of current plant space.

Former Merck CEO Prods Industry on Drug Pricing

I'm not arguing for or againt lower prices. I just want to point out something.

We live in a country whose economy is more market oriented than centrally run (govt) oriented. As a result, you have for profit companies in the pharma industry. The reason to incorporate is to make money. Period. That's the one responsibility a "company" has to abide by. As long as medicine continues to be a for profit business then the way it is will continue ad infinitum. Putting restrictions on profit motive will make future investment (R&D) more expensive relative to future profit. Ultimately, This means that their are some drug candidates that are not as risk free in developing and these will be the ones not pursued. Breakthroughs wont stop, but they will come at a much slower pace.

Personally, I think people are having an argument over the wrong question/issue. It's not about legislating the prices that companies can charge. It's about whether pharma should be allowed to be for profit companies. Non-profits could still invest for R&D as current Co's do and still charge less because they don't need to make all these billions of dollars of profits every year.

Buying Fertilizer Stocks In Lieu of Camel Futures

I'll go with/agree with the Krudlow spelling. He's ridiculous. He's a pull string doll that every time you yank it, "goldilocks economy" comes out. Really? C'mon Larry! For a guy with a PhD in Economics, he's got his head seriously far up his ass. I mean, the guy still believes in trickle down supply side economics. GW the first (daddy - the smart one) had it right with the "voodoo economics" line.

I'd really like to see where his own money (Krudlow) is invested to see if it's anywhere near where his brilliant advice says you should invest your money at.

Major Corporate Shift to Solar Energy and LEDs

I love how some people always feel a need to print Gore's name in all uppercase "ALGORE". Tells you everything you need to know.

Further Musings on Solar Stocks

I consider fundamental analysis to be similar to einsteinian physics. With physics it works perfect for 99%+ of the situations until you get to the very very small where quantum effects take over and the rules you've been using don't work anymore and break down. Fundamental analysis is simlar, I believe, when using it on young industries that are not close to being mature slower grwoing companies yet.

Further Musings on Solar Stocks

Hey Jack,

If solar were a more mature industry I don't think I would have any issue with anything you've mentioned above. The only mistake I think you may be making is in applying good and very solid fundamental analysis on an industry that is still in, for the most part, hyper growth mode at the early part of its lifetime.

Another function of p/e spreads within an industry relates to the markets belief of risk for each company to execute and earn the projected revenue/earnings going forward. Companies in China are harder to ascertain whether the news is actuality, as well as having less news/releases, and so they therefore generally have lower p/e's than western based companies that other than location are exactly the same.

I would argue with your assessment of FSLR and the others being no different. In fact, there is quite a bit of difference. FSLR has a higher profit margin than all the other solar companies. They have already presold 70% of all the panels they will make through 2012, which includes all the currently announced factory expansions taking them to 1 Gigawatt per year by around mid 09. Except for FSLR, all the ones mentioned above use silicon and as far as I know they all make them they same way in that its a slightly modified version of CPU chip making with many less steps than CPU chips, but still lots more time/work to create that wafer of cells than FSLR takes. FSLR is automated continuous line. They've been increasing the Mw run rate of each line each quarter. Even if another company were to start doing thin film with CdTe they would have to find a different way as FSLR's line tech is proprietary and they have intellectual property on that. Most of the other companies buy stock solar equipment from manufacturers.

If you're looking at companies that all use stock solar equipment than I agree with you exactly on selling whatever the higher p/e stock is and buying the lowest p/e stock because they are the same - apples to apples. So while FSLR does have a high p/e it should have a higher p/e due to their tech position over those that aren't innovating at the edge. I'm not justifying the current price or saying it deserves to be higher, but I do believe it should have a premium to the others due to its position. That may change going forward, but right now, they are the clear leader and will be for at least another few years. Of course, what premium they should receive is open to debate. Going forward, I do not expect to continue to see a premium of 100%+ to the average of the field.

Trina Solar: Best Value in the Solar Space

I don't have any real disagreements with what you are saying. the PEG ratio is usually a large consideration for me with regard to buying equities. However, I do have a little different philosophy on whether the FSLR you mentioned is truly overvalued. I think the PEG ratio is a better analysis tool when looking at more mature companies, or at least companies that are the same in that they make their product/revenue by the exact same process - say VISA vs MA - with the only difference being execution or business practices therefore it makes sense to buy the undervalued one of the two, or however many are in your set.

Without discussing or debating the prospects of FSLR's revenue/earnings growth rate and whether it merits the current 2008 p/e I would first point out that "analysts" havn't been correct on this company once since the very first qtr as a public company. Considering the percentage amount that the company has managed to beat "analysts" projected earnings every quarter to date I think it is prudent to realize that the current 2008 p/e for FSLR, and some of the other higher priced stocks (on p/e 2008 ratio) are only correct so long as the "analysts" are correct this time. While this doesn't bring the PEG ratio to TSL levels or any of the China based solar plays, it would lower it.

First Solar and SunPower: Competitors With Synergy

I also agree with Andrew regarding FSLR. Of the current public PV companies it is the best. People keep talking about Nanosolar/Miasole, etc... but neither is at commercial stage yet or producing more than a few (less than 10) Mw per year. By end of 2009, FSLR will be at roughly 1000Mw per year, or 1 Gw, of production. For thin film solar FSLR is the only one to own. They are years ahead of the competition.

First Solar and SunPower: Competitors With Synergy

SPWR has a lot of intellectual property as well on their products, which helps keep them in the lead over other silicon PV producers, like REC mentioned earlier.

First Solar and SunPower: Competitors With Synergy

Andrew,

Only thing I would point out is that I believe the reason SPWR does not use all of their own cells for themselves is due to contractual obligations to deliver these cells, which were in place prior to their acqisition of Powerlight, which then allowed them to use their own surplus cells after contractual obligations for themselves.

First Solar and SunPower: Competitors With Synergy

where is STP in this? They are bigger than SPWR and the stock is valued lower! Might want to mention them; unless this was an article about US companies..

Scott
-marketbar


Pretty Simple reason STP isn't mentioned - they aren't a market leader in terms of innovation or efficiency. What's the conversion of STP panels? SPWR is at 22% currently. I'll bet you even money STP is in the 15-16% range. That's why they aren't mentioned. SPWR makes other products such as roof tiles that substitute for roof shingling during construction of a new home while STP does not have such a product that I am aware of. That's why STP isn't in here. Again, I may be wrong, but I don't believe STP installs system as well as panels whereas SPWR is vertically integrated, which is another reason.

While STP may be a good investment its a China play and the way they win is through mass production and saving on labor, not innovation. Think SPWR as being more Intel with innovation versus STP being more AMD in backward engineering Intel's successes. Whenever any crunch or industry consolidation occurs I am way more confident of SPWR's ability to survive/weather the downturn and come out with gains versus STP whose only advantage, at best, is cost.

First Solar Q4 2007 Conference Call - Visualization

I like it.

Morgan Stanley's Top Long Ideas For 2008

Agreed. A few, if not all, should outperform the overall market next year. The biotech play will, of course, depend mostly on phase trial data being good and/or a takeover for an upward move of any size. I also agree that Monsanto is not valued correctly. Every year there is more GM crops than the previous. Its a good long term play.

Morgan Stanley's Top Long Ideas For 2008

Agree with Rodcore that no new info on this post other than maybe the biotech. All these others have been known for some time and are not "new" ideas. April of 2007 was the time for AMZN, not after it's up close to 100% since then. Same for MON. Time to really buy FSLR was in Feb of 2007 after they reported the first blowout qtr. While you could still make money on FSLR, it won't be as much as what you've already missed. They have a 25 p/e on 2010 earnings, and that's using analasys of previous qtr's results with no extra for further efficiency gains, line speed increases, further plant expansion, etc... The 25 p/e could very easily be overstated to the high side if they continue to increase overall efficiency as they have to date...