In the Battle of Best Solar Plays, U.S. Is a Distant Second

This article has 21 comments:

•  
  silverbelg

  Jul 21 09:25 AM
  there are many more in Europe, f.i. Q-CELLS(Germany) the biggest producers of solar cells worldwide and diversifying rapidly into other technologies including thin film, REC(Norway) a very important supplier of silicon and investing also in the rest of the solar industry. Just bought a installer of solar systems in the US
•  
  User 165982

  Jul 21 09:51 AM

  My Website
  Evergreen is affliated with Qcell and is just now bringing its production
  of superior efficiency and lower cost solar panels on line.
•  
  dicki31785

  Jul 21 10:20 AM
  The American solar shares trade also at a huge premium compared to the Chinese counterparts....FSLR especially...SPWR is not cheap by any means either....ESLR has, roughly, twice the market cap of CSIQ with sales of what $16 million....Showing that these firms are just not as cheap as the Chinese, or even German or Spanish firms....
  
  Concerning the three stocks FSLR will be eaten alive, I mean just destroyed...I would be quiet surprised if they manage to ever see their ATH again....(but they got major support from the institutional investors) I do not believe in thin film(poor efficiency but cheaper thats not enough)....also the Telleraium issue....Their advantage will be eaten up in no-time if a lot of Poly becomes available...
  
  SPWR I like due to its management....ESLR I just bought after Q2 results....The Quad technology is quiet nice and the stock will explode when the first solid earnings come in sight.(Probably Q4 2008-Q1 2009)...But in summary they are just quiet expensive with no advantage that justifies their premium to Chinese counterparts(yet)........ why my main solar holdings are in CSIQ and TSL...
  
  They took care of their financing problems....and it looks like they might have found a bottom....With Kind regards from Germany
  CW
  
  Long ABX, AUY, CSIQ, ESLR, SSL, TSL
•  
  dicki31785

  Jul 21 10:21 AM
  *that is why my main holdings are in CSIQ + TSL
•  
  akeygon

  Jul 21 10:48 AM
  The author seems to have forgotten to mention silicon wafer producers-LDK and SOL, in my opinion the most promising solars ever. LDK with a new plant (-s) to be finished soon will improve significantly its margins and PPS.
•  
  RobDC

  Jul 21 10:59 AM
  The author's cursory analysis of ESLR belies a lack of knowledge on said company. They beat analyst estimates, and they don't have much production online currently which explains why they had such "ridiculous" numbers in such a "golden time". A more careful look at ESLR would show that Evergreen is actually doing better than nearly every other solar play out there during the past 3-5 months of market sell-off, the stock price being largely unchanged.
  
  akeygon, I agree. LDK is a great company which will be one of the survivors.
  
  Additionally, the author points out the European subsidies are far ahead of the American subsidies, and that the Americans are behind in that regard. Considering that the future is an important consideration when buying a stock, I think it's actually a positive thing that the US is currently warming to solar subsidies - a factor that will most likely play out well for US solar companies this election year. Europe is very shaky on subsidies and decreases are being discussed, whereas in the US it is almost a given that subsidies will proliferate and increase.
•  
  David White

  Jul 21 11:08 AM
  It seems a certainty that SOLF will beat again this quarter. The only question seems to be by how much. I am hoping by a lot. SOLF shares are still shorted a fair amount (about 6M according to TD Ameritrade). This would provide an extra lift up when the short sellers start covering their shorts. SOLF reports Aug. 15, so it shouldn't be long now. Both FSLR and LDK report July 28, They should both have good earnings. That ought to push SOLF up somewhat. By the time it finally reports, I am expecting it to be in the 20's again. OF course, this is probably to a great degree dependent on overall market performance in the meantime. Still SOLF performance should be good over the next month.
•  
  dicki31785

  Jul 21 12:06 PM
  @Rob Doc In Germany we got decreases of 8% per year(without a cap)....Why should the government(tax payer) pay for the margin of these companies....In Spain a harsher reduction will come....Not as bad as feared but still significant I see a cap of 750 MW and a cut of subsidies around 20%....(compared to analysts saying a cap of 300 MW and subsidy cuts of up to 30%)Which is still isn't enough to curb demand that much(1.1 GW vs 750 MW)...Although i could also imagine the scenario of 30% subsidy cuts without a cap....which is much better scenario for solar makers since demand won't be effected as much as one would expect thanks to Spain's placement on the "solar map"
  
  Since other countries are putting bigger subsides online such as Korea, Italy, Switzerland etc. etc.......It is only natural the countries with already a lot of PV cut their subsidies a bit while prices are coming down....and countries still lagging behind are bringing programs online....So the subsidies in Europe are much more stable and EXPANDING even with the Spain factor(Not even to mention worldwide subsidies which are increasing as well)....And if an American program ever does come around, in a large scale, it will help that much more....Including other countries such as China, Great Britian, Greek (once they focus on solar expect this to be a HUGE market), India, France, etc. etc. etc.
  
  In any case my point is that Germany and Spain lowering their Subsidies is normal, if Spain does not overdue it, since the costs are coming down and thus not that high amount of subsidies is needed to keep demand for Solar high!In Germany we for example we expect a significant increase in solar installations, despite the 8% decrease in subsides. With kind regards from Germany CW
  
  Long ABX, AUY, CSIQ, ESLR, SSL, TSL
•  
  User 226214

  Jul 21 01:44 PM
  I agree with Dicki, So far CSIQ and TSL are the best and lowest risk on the solar group.
  
  I am long with TSL, CSIQ.
•  
  Wayfarer

  Jul 21 03:43 PM
  News out of Spain on their tariff was what rocked SPWR. Their earnings beat street estimates. The tariff news also rocked his favorites which I like but not to the exclusion of SPWR. SPWR's new lines are going in at over 23% efficiency. STP is putting in 19% efficient lines. The authors favorite companies have technologies with solar efficiencies of about 17%. The math 23/17 = 1.353. Also, SPWR is going to have an inside track in the biggest market of the coming decade, the U.S.. The little Chinese solar companies are good bets near term, long term put your money on SPWR and STP.
•  
  number2son

  Jul 22 08:29 AM
  Agreed with other comments pointing out this author's poor analysis of Evergreen (ESLR). They are executing precisely against their business plan as they move from a R&D company to state-of-the-art manufacturer of solar panels.
  
  Articles like this illustrate the ongoing confusion about the ongoing confusion among investors about this company. And given their clear guidance, provided must fully recently during their investor-day event and recent earnings call, there is really no excuse for this. Particularly among those who would suppose to write about the company on a widely-read investor web site.
•  
  gebby

  Jul 22 07:10 PM

  My Website
  why are solar stoks going down. the earnings and outlook are better than ever. this happened last sumer also when csiq was 11 and solf 7 and eslr 8 . is it a campaign on the part of large industial companies that prefer oil and wind? i am suspiscious
•  
  User 226214

  Jul 22 07:25 PM
  The only looking good solar players are CSIQ, SOL and TSL
  
•  
  Fraggeren

  Jul 22 10:33 PM
  I chose STP long after also considering TSL and YGE.
  
  TSL have a rough time funding expansion, right!?
  
  topsil.dk can create 24% efficiency.
•  
  windinmyface
  2

  Jul 23 01:22 AM
  No one in the US is serious about solar, except the money players,so it will continue to be a roller coaster.
•  
  gga

  Jul 23 10:00 PM
  "For a $6 billion company, $28.6 million net income is simply not enough to encourage investors. "
  
  This statement is intentionally misleading. Since when is quarterly net income stated as a percentage of market capitalization ($6 billion)? Comparing quarterly net income relative to QUARTERLY GROSS REVENUES is the accepted accouting norm, unless one has an agenda.
  Dislosure: Long SPWR
•  
  supershort

  Jul 24 04:28 AM
  "For a $6 billion company, $28.6 million net income is simply not enough to encourage investors. "
  
  This statement is intentionally misleading. Since when is quarterly net income stated as a percentage of market capitalization ($6 billion)? Comparing quarterly net income relative to QUARTERLY GROSS REVENUES is the accepted accouting norm, unless one has an agenda.
  Dislosure: Long SPWR
  
  Not misleading at all. It is a way to gauge P/E ratios which SPWR has an absurd P/E ratio. Given that this last quarter was guided down, they beat their lowered guidance. They also are a heavy player in Europe because of the subsidies because they are more expensive than the Chinese counterparts. Since they have announced plans to start fabricating in China, to lower costs but as most things fabricated in China show, you get what you pay for, a cheaper inferior product. Why should this be any different?
  
  As far as the "energy crisis" bubbleheads go. Oil can go to $500 a barrel as long as nat gas and coal remain stable, which they should as they are abundant in the US, thankfully, it should not have an impact on electricity costs, period. Grid parity in the US will probably never be reached because of this and it is for this reason, among others why solar will not be a major player in the energy sector in it's present form. If it can be much more efficient and cheaper, without taking up acres of land to power a handful of homes, then you have an argument for a long position on SPWR.
  
  Given that the subsidies will be cut in Spain, and Germany is mulling reinstating nuclear power and cutting their subsidies, and there seems to be a push for wind, look for SPWR to be in the 20's by January 09.
•  
  dicki31785

  Jul 25 07:49 AM
  I Think your post is sort of misleading....Germany'... plan was to take nuclear power of the grid at a certain point of time....whether the plant could run longer or not....Thus abolishing nuclear power...This is indeed still the plan though....The only difference now is that they said "energy prices are quiet high so why not keep them until their lifetime is used up"...Furthermore the excess profits that the companies would get from keeping them on longer(since their is not really that big of costs to still incur....its just pure cash for the companies such as Eon, RWE, Vattenfall etc.)...would not all go directly into the pockets of the companies...actually Germany is planning on using that money(by some sort of extra tax or something of that sort) to pay off (part of)the bill for their renewable energy subsidy....So the move Germany is making is actually quiet friendly to the renewable energies around the world....
  
  To SPWR...If you look at present numbers obviously 28 million net income is not enough for that valuation....but as we all now the stock markets incorporates in its valuation the future....And SPWR is actually quiet well managed and if it goes back down to $60 a strong buy....SPWR strategy relies on buying sales offices in expanding solar markets(Italy, Australia....etc.etc.) and thus gaining solid traction in these markets...The Spanish subsidy cuts I already have discussed and surely won't be as severe as expected, though it is about time Spains gov't clears up the situation so companies can plan better...and a lot of uncertainty which is surrounding solar stocks presently would be gone...Well my point was SPWR won't go down to the 20's....as they always say buy when the mood is the worst...and for solar stocks the outlook is pretty gloomy, predominantly, right now so it could be a buying opportunity...With kind regards from Germany CW
  
  Long ABX, AUY, CSIQ, ESLR, SSL,TSL
•  
  User 226214

  Jul 25 07:26 PM
  If you look carefully at all the prospects. TSL is most valuable. However, SOL and SOLF is the second. CSIQ is with 1B market cap now.
•  
  VP of
  Common Sense

  Aug 03 11:04 PM
  Didn't CSIQ already release Q2 earnings, or pre-release them? Estimated earnings were $33-35M etc., should be around $0.77/share...
•  
  H.J. Huney

  Aug 07 02:33 PM
  Everyone seems to treat all the solar companies as if they are the same rather than looking at them individually. Some of the Chinese solar stocks are probably good deals right now (personally, I like LDK), but others might not be.
  
  People are underestimating ESLR. When you say, they had "disappointing earnings", you're assuming that they expected differently. I don't think they did. They are right where they want/need to be right now. I think their next quarter earnings will probably show much of the same or it will be slightly positive; but mostly people will still overlook them till 2009.