Piggybank

Goldman Turns Cautious on Solar Sector

/quote
Molnar Tuesday cut his rating on First Solar (FSLR) to a Conviction Sell from Buy, slashing his price target to $103 from $365.
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Seriously, if Mister Molnar is just going to pull prices on the fly from his ass, then he can aswell make it a nice round number. 103$? Why not just a 100$? I'd like to see their calculations scheets that first turn ip with 365$ and a few month's later with 103$.

Anyway, if you listened to Molnar when FSLR was at 315$ not that long ago, then you'd be seriously screwed over with this new target. Maybe GS should start to predict the fluctuations months into the future, like FSLR will first go to 365$ and then to 103$ and then to 25.689$ and 24 cents and then back to 5$.

Light the Way with LDK

Eh...

@Gaucho:

No i'm not really pumping REC, i doubt i could even do that. But i should have understood from the article that LDK didn't produce enough polysilicon in the first place for it's own wafer production. I was under the impression that LDK was a company mainly producing polysilicon with the smaller segment being wafer production. I should read more of their presentations.

Light the Way with LDK

As a last note, my portfollio is largly comprised of large pure play company's in the alternative energy space, with a heavy emphasis on wind energy and a somewhat lesser emphasis on solar energy. Because i am European many of my investments are European company's as well.

My large wind positions are Vestas, Gamesa, Nordex and Repower, basicly i like virtually all wind turbine company's and they are performing quite well trough this crisis, especially Vestas.

My larger solar positions are Q-cells, REC. Some smaller positions in more risky solar stocks like 5N plus and Ascent solar.Mixed results over the year but the volatility has been nice for trading. I have been playing with such stocks like LDK, CSIQ and SOL on earnings, and i often switch volumes of positions during earnings periods.

I keep away from such stocks as FSLR and SPWR. I tend to keep away from high priced stocks as there is plenty to be gained in less riskier stocks at this point. However you look at it though, it's been a great bargain time for many good alternative energy stocks, and i wouldn't mind another credit crunch induced dip to buy some more cheap stock.

Light the Way with LDK

REC and LDK are both competing to become the worlds largest polysilicon provider. However REC is a fully verticly integrated solar company, doing everything from producing polysilicon to fabricating PV panels and selling and installing them, whereas LDK mainly produces polysilicon and also does fabricate some waffers.

So basicly, as for large polysilicon providers, should the price of polysilicon alter significantly then it would affect LDK more than REC, as REC has a large amount of it's revenue trough it's pv panels. Should the price drop significantly then REC won't be affected too much as it can reserve large amounts of it's own polysilicon for it's own PV production. LDK is dependant on customers, fabricaters of solar pannels and cells, to buy their products, and when prices of polysilicon and/or wafers go down then their revenue would be affected significantly.

REC is also quite larger than LDK and in a much more financially stable situation, as REC is one of the largest and is the most profitable solar company in the whole solar space, it's also one of the oldest solar company's, one of "the 1st generation", and at that survived some very troubled times for this sector.

LDK, with it's large investment to expand polysilicon production, is in a somewhat more risky financial position, wel mainly should polysilicon prices go down. How likely is that? I don't know, even the analysts have quite mixed oppinions about it, personally i think they won't be affected much, and that LDK is actually quite a good investment, but REC's verticly integrated structure, size and age and profitabilety makes REC one of the most conservative picks in the solar space, and i prefer taking as not too much risk.

Even then, LDK has long term contracts with one of the best company's in the solar space, German Q-cells, set for years, and some other company's. Rec has contracts with the same company, although REC does buy some cells from Q-Cells. My oppinion has always been that these long term contracts mean that the solar industry isn't affected much by this crises, if at all, especially since many of such contracts have been created during this crisis for various company's in the solar space.

Location plays a role to. LDK is strong in China, REC is strong in Europe and USA, atleast iirc, and depending on how the political wind might blow this could favour REC somewhat, or not, but i think subsidies in Europe and USA will rise in volumes. Not that REC really needs subsidies, actually they are now also busy with setting up a large polysilicon plant in Singapore.

Afcourse, at 20$ LDk was just a blatent no-brainer, PE wise, and i was expecting them to end on atleast 50$ by the end of the year. At some point during this crisis LDK was just the cheapest stock in the solar space for a company that made solid revenue's and profit. Hence why many pitched it here.

For the long term i prefer REC above LDK, REC is that rich that it might outexpand quite a few competitors in the long run, it's deffinatly big and strong for a solar company. LDK is more of a risk, but pottentially very rewarding, even at this point, but afcourse lesser so than when it was at 20$. REC was a relative bargain when it retraced to 14-15 euro's too, and it came there again when LDK had a nice move up, so i didn't mind changing position from LDK at that point to REC.


Disclaimer: I'm not an analyst, just my own perception of these stocks, from what i know and have read.

Light the Way with LDK

Ive been rather adding on shares of REC from its recent low, very nice profit on this one to recently. Ive actually sold my LDk's to buy REC's but the result in gain is about the same since. The reason ive changed is because LDK in the long run would be more exposed to fluctuations in polysilicon prices than REC would be.

The 'Problem' With Solar Companies is Not Really a Problem

I gues they just had to find a reason for their downgrade. It would actually be quite funny if the market wasn't dropping like a stone right now.

But i think we already established the fact as investors that much of the oppinions we get from these banks are very superficial and usually just crap.

Their motivations arn't hard to read neither. If all thing's move so fast on upgrades or downgrades, then afcourse it's an easy for these banks to manipulate their positions in their advantage, be it holding or shorting. And we all know they need money very very badly. Manipulating a market then that is very volatile can afcourse provide a lot of potential for money maing then, plenty of possible down- and upside potential.

I live in Europe to, and i have my skepticism to when they tend to touch European subsidies. I am however glad that Europe is years ahead in the market and that our policy makers have shown some vision about alt energy that they arn't likely to drop that fast. Alt energy is a growing sector in Europe, one that provides a lot of income and employment, it's enough incentive IMo for our politicians to continue their support.

And it doesn't always have to be subsidies neither. One particular German city for ex. is now forcing people by law to install solar panels on every new build house from now on. It is expected that by 2010 this will be coman law all over germany, if not also in many other EU country's.

The 'Problem' With Solar Companies is Not Really a Problem

Well said. The analysts made me laugh to. Way to state the obvious.

I don't give a shit about what they say neither.

Solar Power Plays Look to Grow with Clean Energy Act, Spanish Subsidies

What about the frikkin European solar company's, shouldn't they profit from the Spain case for ex. ? Renesola maybe? Q-cells or REC?

It seems that to SeekingAlpha and so many sites that promote solars, European solar company's simply do not exist!

Suntech, SunPower, MEMC and First Solar: Four Solar Stocks Worth Investigating

All these seekingalpha guys forget about such company's as REC and Q-cells. In general there is very very few talk here about european renewable stocks. Even as they hyped the market in 2007 few ever came to talk about such great company's like Vestas or Gamesa, wich is wind power.

But my money is mostly in european renewables. REC, Q-cells, Vestas, Gamesa, and not to forget Roth & Rau, wich is an excelent company and just tottaly forgotten here.

Beware of the Solar Stock Fad

I think you need to be an American to say this kind of stuff.

While many of you americans are driving on high oil consuming SUV's and just waste energy as it's no big deal, atleast here in europe were atleast 10 years ahead in saving our energy with all sorts of measures. Someone here mentioned this energy effeciancy, other ligtbulbs and that kind of stuff. Well i can simply say to them, it doesn't work like that over here in Europe.

Were 10 years ahead in energy saving, but living in brussels i have this very keen sense that the EU will actually expand subsidies to renewables, having read article's from top euro politicians here who all seem to hammer on solar/wind, and who all hate biofuels for the rediculous pricesurge it creates in food and such.

And it's perfectly reasonable from an EU perspective, way to many euro's flow out from the Euro zone to oil producers. And we have emmerging markets to compete with i general economics. If the EU wants to survive as an economic powerhouse in the future then it has to remain on the edge of many technoligies, and alternative energy is one of those technoligy's were were doing quite well in. It's creating jobs for us, we can make an export product of it, it lowers our energy bill, win win win situation. European wind energy is miles ahead of the rest of the world, we have all the top wind turbine manufacturers.

And it's quite simple to piont out that Europe is the largest market for all renewables, Germany on top. In fact America's own solar company's have ther majority sales in Europe. And if europe increases renewables funding then yioure point vanishes into the drain.

it only shows that Americans don't take their energy problems to serious. How else could they have lagged just so far behind Europe. The posters article here just shows that sentiment.

And to US politics. No renewal of renewables funding? Go for it! by 2020 Europe and china will dominate the renwables market. Heck youre own wind farmers aleady buy European turbine's. Keep fooling on!