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GT Solar: Will the Sun Shine On This Solar IPO?

by: Tate Dwinnell July 21, 2008 | about stocks: SOLR    

Tate Dwinnell

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gt solar solr ipoThis week,  the IPO market will get a bit of boost in what has been a lackluster year for exciting  companies coming to market.  This week, GT Solar (SOLR), a New Hampshire maker of solar cell manufacturing equipment,  is expected to begin trading under the ticker symbol SOLR. 

Sure, there are far too many solar companies right now and this sector is overdue for a shakeout of buyouts, blowups and mergers, but in this environment  it's good to see any company generating a profit come to market. GT Solar is certainly doing that with revenues and profits exploding over the past year, allowing the company to turn its first profit.  I like the fact that it is a "pick and shovel" play in the industry providing a complete turnkey solution with equipment and expertise to allow solar manufacturers to get up and running quickly.

This is a company growing rapidly with a big backlog of $1.3 billion, but with 60% of its business coming from one customer it's not a company that's well diversified so carries considerable risk.  Also, none of the proceeds from the IPO will go to the company, but rather the investors. 

I suggest reading the two analysis articles below for more in depth details on the company.  As I do with all IPOs, I'll let it trade for at least two weeks allowing it time to carve out a bullish technical formation. 

A few links of interest:

Presentation by GT Solar executives

Analysis from Small Cap Investor (requires free registration to see entire article)

Analysis from Money Curry (not a fan of all the ads but the analysis is detailed)

Disclosure: None

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This article has 3 comments:

  •  
    Jul 21 09:24 AM
    GT Solar should not be purchased. Given their hi valuation and focus on c-Si they are "old tech", soon to be replaced by thin film which has significant production cost advantages.
    Reply
  •  
    Jul 21 10:38 AM
    Oh - OK....guess we should have bought/be buying ASTI....given past recommendations and its stellar performance.
    Reply
  •  
    Jul 21 06:38 PM
    Received this today after forwarding copy of this article:

    Subject: TechPrecision (TPCS) - Growth in Solar

    TechPrecision (TPCS), with over 50 years experience in the high-precision manufacturing business, currently has the majority of its business coming from the solar sector. With TPCS’s focus on long-term contracts and those in the high-growth solar industry, TechPrecision realized substantial growth, as reported in its Year-end results for March 31, 2008. Some highlights of those results were:

    · Net sales increased 66.6% to $31.8 million

    · Gross profit rose 135.2% to $8.3 million

    · Operating income grew 342.8% to $6.4 million

    · Net income rose to $3.5 million from $290,000



    The article below and the link to a WSJ article shows how TPCS’s largest customer, GT Solar is in the process of an IPO of over $500 million, which looks to buck the trend in the recent IPO market. When looking at the solar industry, Solarbuzz has reported that PV industry revenues will reach $26 billion by 2011, which represents a 19.7% compound annual growth rate.



    TPCS is a highly valuable contractor in the alternative energy industry and is well positioned to capitalize on that growth.



    Best regards,



    Aubrye Harris

    CCG Investor Relations

    Ph: (310) 477-9800 ext. 103
    Reply
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