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    • Need Cash? See Suntech [view article]
      Dean,
      We can only hope that their investment in silicon supply is at a price that turns out to be too high. Why? That would imply there is abundant silicon at low prices that Suntech can mop up to make even more panels, at prices even closer to grid parity.
      Grid parity is the key word.
      Suntech talks about $0.50/W of 'other' costs on top of silicon costs. It seems to me silicon cost can go down to $0.50/W as well, getting them to $1/W total module cost. That's low enough to be real competition for fossil fuels, allowing the solar industry to ship enormous volumes. This way Suntech has a path to grow their revenue 10x.
      Note that electricity prices in Europe are very high (due to the high Euro and the high natural gas price which is linked to the oil price), so grid parity in a country like Italy is not far off.
      As of yet I don't see competition from thin film technologies that would derail this plan.
      So what's a fair value for Suntech stock? Currently their profit runs at about $2/share; I think they're worth a P/E of 50, so the stock is worth $100/share, growing 50% per year for the foreseeable future.
      What if their upstream silicon investments are a failure? It wouldn't change the fair value calculation much, as long as they can get cheap silicon elsewhere.
      What about other risk? All sorts of minor problems can and probably will occur, but I don't see a big risk that can cause a total failure here (although it is likely that some day a new, better solar technology will make all current technology obsolete).
      Full disclosure: I'm a shareholder.
       Aug 25 04:23 AM
    • Solar Stocks: Nine That Will Shine in a Bull Market [view article]
      Nuclear is not safely scalable for worldwide deployment.

      Just imagine World War II with Germany, France, Britain, Russia, Japan and the US 'loaded' with nuclear facilities and bombers and missiles flying back and forth targeting those facilities.
      Or try to imagine Iran and Iraq at war with each other while 'loaded' with nuclear power plants.

      Done imagining? Then you realize spreading nuclear power implies spreading nuclear warfare capability around the world.
      With a nuclear facility in your backyard you give any potential enemy the option to explode a nuclear bomb in your backyard.

      That's a bit too scary for my taste!       Apr 22 07:24 PM
    • Western Digital: Undervalued and Underappreciated [view article]
      Historically, disk drive companies have traded at a low P/E.
      Disk drives are commodities and this industry used to be very cyclical and competitive. However, in recent years a lot of consolidation has taken place. It's now dominated by only 2 companies: Western Digital and Seagate.
      Therefore, I think it's deserving of a higher P/E.

      Disk drives are a commodity that's needed by everybody around the world. China doesn't just need iron and coal; it also needs disk drives!

      Western Digital has executed very well. They've gained market share. They are a low cost producer. They've made a good transition to perpendicular recording. Last year they picked up Komag at a low price. Recently they've made a big advance in the smaller drives used in laptops. That's giving them a big boost.

      Longer term you have to consider the impact of solid state disk drives. I think conventional disk drives will continue to remain far cheaper and the best solution for storing large files such as HDTV movies.

      These are some reasons why I've picked up shares in WDC. My 12 month target price is $40/share. A spoiler could be a global economic recession (which is not occurring yet despite the problems in the US).
       Apr 11 04:14 PM
    • Red Flags at Emcore [view article]
      Emcore has good technology for high-efficiency cells that are used in space projects.
      That gives them a nice starting position to deploy solar power on earth as well.
      For instance, they can address the large market for utility scale renewable energy in states that have a renewable portfolio standard. They can also target countries like Spain that have a generous feed-in tariff for utility scale solar power.
      So, they have plenty of opportunity.

      The question that is still open for me is: do they have the business savvy to make this potential come true?
      Terrestrial solar power is lot more down to earth (pun intended!) than the high tech they are used to.
      Can they come up with ultra low cost optics and tracking systems and produce them in volume with a supply chain in low cost countries?
      Are they able to strike deals with utilities and large commercial accounts?

      I call upon the board of directors and the shareholders to consider this question carefully: is the management in place to pull off this difficult new business? Or is new management needed?
       Mar 24 03:22 PM
    • Red Flags at Emcore [view article]
      Keef,
      Have you interviewed that company Square Engineering?
      If yes, what did they say?
      If not, why call it a scam?

      If not defending anybody here. I'm just asking for facts. That's more helpful than heated talk.       Mar 19 01:09 PM
    • Red Flags at Emcore [view article]
      Some important information about Green and Gold has been left out of this article.
      Green and Gold has a strategy to sign up licensees to manufacture the Suncube product. A company in India with the name Square Engineering is featured on the Green and Gold website. This company apparently has signed up. A newspaper article about them says the Suncube will cost about US$1500 which is equivalent to about $3/W if compared with conventional solar panels. That's a competitive price.

      The Suncube product seems pretty straightforward to me and I think in high volume it should be a lot cheaper. If they get it down to $500 they would hit $1/W, which would be a nice target and position them well.

      The Suncube design needs to work, of course, and be durable and reliable. So it's up to Green and Gold and Emcore to prove this.       Mar 19 02:33 AM
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