supershort

Solar Stocks Continue to Roll

They sure are on a roll...they are about to roll over.

3 Reasons To Be Bullish on Solar Stocks - Cowen

To all you guys, hold on tight to your longs. SPWR is going to the 30's within the month. Earnings were as expected, but you guys don't want to look at the fundamentals....These stocks trade at very high multiples. These are pipe dreams of people looking for a lottery ticket at these levels.

As far as investing 10k in CSCO or anyone that "made it" in the 90's....there are hundreds more that crashed and burned. Besides, the early days of MSFT, the insiders weren't selling, they were holding or buying. SPWR, they are selling like mad.

I am not telling half truths or lies. I only tell it like it is.

3 Reasons To Be Bullish on Solar Stocks - Cowen

Steve Pluvia,

You have no concept of anything about fundamentals or tech rallies. Tech rallies once born tend to have this euphoria which isn't justified by the multiples long term. Even if some of these companies are profitable, their earnings would have to quadruple to have a P/E ratio comprable to other stocks in the universe. Tehre would be good reason to buy a stock with good growth at say 25-50 times earnings, but never at 700 to 800. The fund managers that track "emerging growth" stocks will have to unload these stocks if they can't keep up the pace as they won't meet the fund criteria. If they are finisged their growth then the "value" guys pick them up. Or the dividend guys. I don't see that happening in the near term.. Take SPWR, one of the last ones out there with an absurd P/E: They missed their earnings last quarter and stated that there are "difficulties ahead." They will report on April 17th. I cannot forsee them increasing guidance, given that the job claims came in at 407,000. Retailers will be looking to close stores not invest in building out expensive improvements on leased property. Looking for SPWR to lose 50% by that day.

Forget about a recession. We have been in one for at least two quarters. Hope we don't go into a depression. At the very leastthe economy will get worse than what it is now in the next year to a year and a half.

Solar Stocks Show Signs of Life

Thanks kkin365. I am still adding puts to my short position. I am fortunate that the stock can still run up a bit more before I start getting a fed or margin call, so for now I am hanging in and looking forward to the next miss of their earnings on April 17th. They missed in January and with the huge jump in jobless claims 407,000, and the retailers going to be hurting, I can't possibly see the retailers going forward with their plans, as was announced by Macy's. They may start to consider closing stores, so why would they invest a tremendous amout of money if they may close/sell stores.
As far as China and the article:www.nytimes.com/2008/0...

Yep, I am eight thousand percent sure they follow standard accepted accounting principles for their government companies. Who are their accountants...Hou, Wi, Foo, Kum & Hasol?

Solar Stocks Show Signs of Life

Institutions also? They are selling also. They are all cutting their positions because the massive residential buildout will not occur this time also. Maybe if they were 7 years earlier during the housing boom, good ecomomy and cheap money. Now the only thing we have is cheap money, but the bank won't give you a loan for such a big ticket, speculative item for your home.

As far as these going to Home Depot. Never until the prices come down alot. They won't for some time as these companies want to bleed the governments first.

SOL is a China stock. I am a free market kind of guy. No company that is owned by a government will be longf in my portfolio, especially a communist one. Isn't that the biggest oxymoron out there, China stocks. They beat up on Monks, subjugate their people, violate all child labor laws out there, pollute like there is no tommorrow. Yep, sure give me a few thousand shares.

Solar Stocks Show Signs of Life

SPWR has not reported any insider activity through the SEC in the past year. It may have reported transaction activity through other regulatory bodies. As a result, the activity below may not reflect the complete activity by the company's insiders.


Monthly Share Rotation Number of Shares Value of Change Percent of Shares Outstanding
Buyers 3/29/08 60,850 $3,999,062 0.80%
Sellers 3/29/08 1,973,109 $129,676,678 3.00%

You guys really need to wake up. There are many "good clean in favor" companies out there. I am not a bear because I don't believe global warming is real. It is real, but we may not have a choice anyway. The earthg was probably meant to be warmer anyway. Look at the prehistoric times. Just because as meteor hit the earth and caused the ice age, we have been getting warmer since. No new news.

I would purchase solar panels if they were right for me, and all should do the same. But if you are an investor or trader, these are totally crap fundamentally. Look at MSFT, IBM, EBAY, GOOG any company that made it. There were massive insider buying, NOT SELLING. I am following the lead of the insiders and institutions which clearly is to sell.

Solar Stocks Show Signs of Life

These companies are trading at a tremendous multiple. SPWR over 600x earnings and they warned at last earnings. I think solar will do well in the future but at reasonable multiples. I am short any company with over 50 times earnings in a bear market which we are in. BGG, SPWR, ALGN, STP, AMT, MTN, SUP are my favorites for now.

3 Reasons To Be Bullish on Solar Stocks - Cowen

One last note. Can I borrow your shares?

3 Reasons To Be Bullish on Solar Stocks - Cowen

Sluce, you are right, I got crushed for a 16k loss of my profits, still up though. The heavy short positions are there for a reason, they see the same things I see. Solar power is one piece of the puzzle. It will not replace fossil fuels. Take California for example. They are trying to get a power plant on 640 acres, that's right 640 acres that hopefully will prduce 177 megawatts. Now even being optimistic, it will be able to be say up 30% efficiency and be able to supply maybe 40k homes. Where is it eco friendly? That is a tremendous amount of wasted land for such little return. I still say nuclear power will be the way to go eventually. At the present it seems to be the only logical choice.

STP trades greater than 94% of it's peers. The growth isn't that good to warrant the present price. Also it's margins aren't the greatest and with the supply of silicone being scarce, as they say, the margins will shrink. Careful with that type of risk. Just look at Ethanol stocks.

I will keep my shorts as I fear if I cover, I won't be able to get back in. SPWR will be back to where it was last year, in the 40's.

3 Reasons To Be Bullish on Solar Stocks - Cowen

G44,

These multiples will come down as the stock prices come down. That is the only way. The groth rate is factored into these ratios and they are not possible in the near future, nor the next 2 years. Durable goods numbers this morning came in worse than expected. We are nowhere near a bottom in this recession we are just heading into. Evenone is hoping that there will be a "V" turnaround bottom but that never happens, look at all the rest of the downturns, there are all "U" shaped. So this volatility will have to end before you go long. This stock will never see 140 again. I know, been burned before by many "profitable" companies that had mickey mouse magical kingdom multiples. If you own these stocks, sell then. There will be a time and place to enter a position. It isn't here or in the next year and a half.

3 Reasons To Be Bullish on Solar Stocks - Cowen

Bought the $55 puts now anyway, in addition to the 2000 short. Will add on any future runup. But I think the runup is done. The last one fizzled at around 80. This one fizzled at around 70. We should see 60 again very soon.

3 Reasons To Be Bullish on Solar Stocks - Cowen

Gebby,

I agree that global warming is real. We have to limit our use of fossil fuels, but it is inevitable that GW will continue as all nations start to expand their economies. Solar power is just a small piece of the puzzle. The P/E ratios are way out of line. It is people like you who just scream "BUY THESE STOCKS" without looking at the fundamentals that I have issue with. As far as future graowth, most of these companies have lowered their forcast earnings for the near future. So where is the need to go out and buy long?

I tried to short another 1000 shares of SPWR and they wouldn't let me because they say there aren't any shares to borrow. Gebby, can I borrow and short your shares please, pretty please, with sugar on top.

3 Reasons To Be Bullish on Solar Stocks - Cowen

Amatteck, federal policy has been to continue with the path we have been going for the last 50 years or so. That is oil, coal and natural gas. Oil was very cheap and so that is why we built our energy system around this particular source. Also, oil is used for other purposes such as asphalt, textiles and powering autos and other vehicles. We have spent a tremendous amount of money on the buildup of this from the refineries, to the pipelines to the plants. So a policy switch to solar is probably not going to happen. Natural gas, since we have a lot of it will play a larger role as the pipelines and delivery system needs to be built. It is also "always on", not like the renewables like solar and wind. For the average person to put solar panel;s on their home is a huge undertaking, even with the subsidies. The home has to face a certain way. The surface area has to be adequate. The biggest hinderance is that you still need to have another alternate source of energy as it doesn't work well as it gets warmer and when the sun isn't out. Also, for companies to buy land or lease building roofs to put panels on them is not possible in this time. Land and homes, even though they have come down, are still too expensive to allow for this scenario. Take NYC or any major city for that matter. The panels would have to be placed very far from the city, cutting down trees and clearing land, more detrimental to the enviornment so there is no saving of a "carbon footprint."

Like I have said before, SPWR is at over 600x earnings now. No company stays at that level for long. These companies will play a part, but I will wait until they get down to earth in their multiples, say like Exxonmobile multiples.

Disclaimer: I am supershort on the solar companies, so I have done my research.

3 Reasons To Be Bullish on Solar Stocks - Cowen

Grid parity is just one piece of the equation. These stocks are trading at incredible multiples. The average homeowner is having trouble paying a mortgage, and now are financing cars for eight years. There is no market for these high priced panels. Also, the carbon footprint to build these panels and the waste involved is not as eco friendly as you are led to believe.

Also, the panels are more efficient and produce more electrictity when it is cold out, so it is when there is less sunlight and less time to net-net the power to the grid. In the summer and in the warmer climates like FL and the south, the peak electrical usage is during the hottest part of the day, again at the least efficient time of the panels. So you still need backup power. Solar will play a larger role but it will never be large enough for these multiples.

Nuclear power is economical, safe, and is the cheapest to run long term. That is a big part of the equation that everyone os leaving out. Once they build more and they will, because we are being stragled here, the government will pull the subsidies on these and go for more self sustaining means os power.

3 Reasons To Be Bullish on Solar Stocks - Cowen

TSL P/E = 24x is comparable to other companies in the Semiconductors industry. TSL's Gross Margin is less than 77% of other companies in the Semiconductors industry, which means it has less cash to spend on business operations as compared to its peers.

Trina is a China company. I am sure that they could fudge the numbers if they wanted to, just by pegging their currency to some other arbitrary thing they pick out of the sky. Why would you want to own a company that is owned by the government, a communist one at that?

STP P/E Ratio is greater than 94% of other companies in the Electric Utilities industry. STP's Gross Margin is less than 78% of other companies in the Electric Utilities industry, which means it has less cash to spend on business operations as compared to its peers. Another China company. Enough said.

LDK's P/E Ratio is comparable to other companies in the Semiconductors industry. LDK's Gross Margin is less than 61% of other companies in the Semiconductors industry, which means it has less cash to spend on business operations as compared to its peers. Another China company? It also has a heavy short interest 24%.

So why would anyone think these are cheap?

Just think of me as Daedalus and these "anallists" as Icarus, trying to get you to fly too close to the sun.