ecoman12453

The Global Agricultural Boom: No Bubbles Here

Exactly...and there is not ceiling for fertilizer under current conditions

Yield per $1 fertilizer expenditure is over $3 in produce in most situations...but even if fertilizer triples in price it can still go higher because the AG commodities will go higher because there is a shortage and demand is the most inelastic for food

So if the underlying AG commodities were to double again..then the ceiling for fertilizers would double theoretically...so fertilizer would be able to go up 6 fold in this case.

Upgrade in Fertilizer Stocks Surpasses Rosey Expectations

Mark, this is traderbill from the Yahoo boards...where did you get a hold of the analyst report. If the numbers are legitimate then MOS and POT can have 100% more upside. I do agree this is a mult-year run for AG and this justifies the high multiples.

Inflation's Power: The Dollar in 25 Years

Why don't you take into account the severe credit crunch occurring in the US. If the fed does not continue to lower rates and inflate then there will be no lending, and that will kill aggregate supply, when that happens as demand increases because we a re a more global economy, eco 101 tells you inflation will be even worse. Also 4% is the current inflation rate by PPI, does it really discount the fact that houses declined about 10% over the last year, I mean most americans have a house worth in the $100,000s i mean $200,000-$500,000 on average, so a 10$ decline in value is like 20,000-50,000 dollars taken out, that is very deflationary compared to milk and chicken rising a quarter at the store.

Inflation is a lagging indicator as well, if we are going to see a slowdown, which i think is inevtiable then inflation will slow down, 4% is not terrible, especially when it is only going to go lower.

Why Canadian Solar is the Best Solar Stock

Going back to TSL, I can clarify how TSL will at worst meet average consensus 08 Estimates, and at best blow out the highest number.

TSL has a net profit margin of $0.35/share for the last 2 quarters, Q2, and Q3 2007. In these quarters, TSL's gross margins were at some of there lowest levels in the last few years averaging lower 20%. Also, last Q, the net profit margin was shrunk due to high OPEX, 11% of Revs, which is sure to go lower. Going into 2008, ASP's are expected to decline from 2007 average by a smaller amount, but the average for 2007 will be slightly higher than the ASP in Q2, and Q3.....Prices declined from Q1 to Q2, remained rather lower in Q3, and then increase in Q4. So what I am saying is Q2 and Q3 saw the ASP's that are low enough to account for most of the decrease into 2008. Now Poly is expected to increase 10% for 2008 but the 10% increase is said to be a peak in 2008 then prices drop in the latter half like YGE said. TSL is expected to cut POLY usage 10% for the 2nd half of the year so they should remain equal on poly costs year over year.

Last, TSL's processing costs/watt are only going to go down from efficiency gains for modules' conversions, and economies of scale, and moving toward 100% in house cell processing.

From $0.35/watt profit margin in Q2 and Q3 2007,

Poly should remain the same for 2008, increased price will be mostly in 1st half but offset by less poly usage,

ASP's will probably be about the same for 2008 as they were in Q2, and Q3 when they dipped to the lowest levels of 2007.

Processing costs will only go down so at the worst case, TSL will maintain the same profit margin of $0.35/watt, (This is sure to increase due to less processing costs, but they will be taxed at a higher rate so I'll say profit margin is staying equal.)

On 200MW (lowest part of guided range) and $0.35/watt profit margin, TSL does $70 million net income. This comes out to $2.75 EPS,


For 2009, TSL has more growth than most other players as they plan to ship double 2008, 400MW, and there's no reason to think they will maintain the same profit margin, $0.35/watt.....ASPs will surely decrease significantly for 2009, but poly will start to trend lower, and they will be cutting poly usage once again, more cell efficiencies toward 19%, and more gains from economies of scale....so if they
maintained the same $0.35/watt profit margin (I think this may go up a little due to the only downward pressure being ASP's but upside pressure being lower poly costs, less poly usage, and efficiency gains, processing cost reductions and economies of scale) If they do $0.35/watt on 400MW for 2009, they make $140 million
or $5.51 EPS for 2009.

Why Canadian Solar is the Best Solar Stock

I agree that CSIQ is cheaper than TSL on a P/E valuation basis, but TSL deserves a premium multiple to CSIQ because they are going to be perhaps the most vertically integrated solar maker, producing modules fro polysilicon all internally controlled.

Smaller less integrated companies run the risk of being killed in a ASP pricing war or not having enough poly silicon