That's good to hear about the tools/technologies that SolarCity uses. They've mentioned in their earnings calls that the cost efficiency gained through software (managing all aspects of the customer's experience) is one of their competitive advantages.
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Alternative Energy Investor Discussions
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That's good to hear about the tools/technologies that SolarCity uses. They've mentioned in their earnings calls that the cost efficiency gained through software (managing all aspects of the customer's experience) is one of their competitive advantages.
I have a Solar City system as do a few of my friends. We all have had very good experiences throughout the process. When the city inspector signed off on my system he told me, "Solar City always does everything clean and to the code, just the way we like it". He went on to tell me that Solar City gets it right the first time where most of the other installers (he didn't name any in particular) have to come back and fix a few things to bring it up to code.
Deutsche Bank predicts imminent upturn for solar industry
Looks like Deutsche Bank agrees with my enthusiasm for Solar; basically everything I have been talking about for the past couple of months:
Deutsche Bank predicts imminent upturn for solar industry - PV-Tech
Select Quotes:
The solar industry is on the brink of a sustained period of momentum
We believe the solar sector is at an inflection point and industry fundamentals are likely to improve further into 2014
“Despite the strong year-to-date performance, we believe the solar rally has legs. Demand outlook is improving due to strong demand from Japan, China, US and other emerging markets. The supply situation is also a lot better in our view - Chinese tier two/three supply cuts have accelerated over the past 18 months and supply from large Chinese companies such as STP, LDK has decreased sharply, particularly in markets outside of China,”
“With the potential resolution of EU/US/China tariff uncertainty, we expect relatively stable pricing, improving margins and further sector consolidation to drive gradual profitability improvement, which in turn could act as the next set of catalysts for solar stocks.”
Looks like Deutsche Bank agrees with my enthusiasm for Solar; basically everything I have been talking about for the past couple of months:
Deutsche Bank predicts imminent upturn for solar industry - PV-Tech
Select Quotes:
The solar industry is on the brink of a sustained period of momentum
We believe the solar sector is at an inflection point and industry fundamentals are likely to improve further into 2014
“Despite the strong year-to-date performance, we believe the solar rally has legs. Demand outlook is improving due to strong demand from Japan, China, US and other emerging markets. The supply situation is also a lot better in our view - Chinese tier two/three supply cuts have accelerated over the past 18 months and supply from large Chinese companies such as STP, LDK has decreased sharply, particularly in markets outside of China,”
“With the potential resolution of EU/US/China tariff uncertainty, we expect relatively stable pricing, improving margins and further sector consolidation to drive gradual profitability improvement, which in turn could act as the next set of catalysts for solar stocks.”
http://www.bloomberg.com/news/2013-01-02/buffett-utility-buys-sunpower-projects-for-2-billion.html
Buffet thing is true, never seen a price target like that tho.
My SOL August Calls needs more of thoose News
The Bloomberg article is a bit old, Jan 2, 2013. But it's still new to me.
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Groundhog Day.
Norse
Active Member
You have earlier said that some of the stocks can do a 10 bagger but that there is some risk. With SPWR now have profit do you still see the risk? And do you still see the 10 bagger? Im still holding all my positions, I actually got more.
SPWR almost is a 10 bagger already - it was trading at $3.71 less than one year ago. Right now it has a $3bn market cap, so don't expect it to have a $30bn market cap or $240 share price in the near future. When I was talking about 10 baggers, I mentioned companies such as SOL who had a $250m market cap (now already at $370m) or CSIQ at $500m (now over $610m); these are your potential 5 and 10 baggers.
The biggest risk I saw in solar was that gross margins would continue to be depressed, which would result in net operating losses. Since ASP's have stabilized and are now actually increasing slightly, this risk is slowly going away (unless some other country "pulls a China" and floods the market with solar capacity in the near future). SPWR's results have confirmed this; they have raised gross margin guidance significantly from just two and a half months ago. They lowered GAAP revenue guidance (but kept non-GAAP in tact) and that is why the stock tanked. But manufacturing costs will continue to go down and the company will become even more profitable based on cost reductions alone. They are going to have to make a tough decision on whether to build a new manufacturing facility to increase capacity. I think they should do it since solar demand is growing very rapidly and capacity keeps dwindling down.
Even without a new manufacturing facility SPWR can continue to grow revenues if it gains traction with it's C7 Trackers. This allows them to get 6x more Watts per panel. An analyst on the call asked a question when we will start seeing some big C7 deals, and the CEO kind of fumbled on that one (although he said that C7 growth should be coming); that is another reason the stock went down. It is worth mentioning though that Apple just announced a 21 MW C7 tracker deal with Sunpower one month ago, so maybe it is a sign of things to come.
SPWR is still one of the safest plays in the industry and I expect the stock price to double in the next 1-3 years, based on production cost reductions alone. If the demand remains strong and the company does decide to increase manufacturing capacity, then this company still has a ton of room to grow and the stock plenty of room to run.
As far as multi-baggers go, look no further than Chinese solar companies. CSIQ is planning on returning to profitability for FY13 and SOL might not be too far behind. If these two companies become profitable, then all they need to do is to start trading at 1x Sales to become 3-4 baggers!
But if industry conditions were to decline (I think that only a deep recession could be responsible for such a situation) then both CSIQ and SOL can easily lose 50% off their current share prices. So that is your risk right now, namely macro-economic risk.
Some news on CSIQ this morning - sold five power plants for $277m (up 4% pre-market):
http://finance.yahoo.com/news/concord-green-energy-acquire-five-105500201.html
From the one or two analysts that follow CSIQ, Revenue expectations for FY14 is $2.8bn. If they can turn a 1% net profit margin or $28m in net profit, that equates to ~$0.65. Now if they can squeeze out an additional 2% then we are looking at $2/share in 2014; and probably a $50 share price to go with it.
These solar companies are very higly leveraged and once they become profitable it will only take a little bump in gross margin to yield huge EPS increases (SPWR is a good example). It works both ways though, so their is a ton of risk in these companies. My extensive research has lead me to believe that the scale is tipped in favor of becoming profitable and I am willing to bet (invest) on it.
Jonathan Hewitt
Active Member
MY CSIQ AUG 17th $14 calls are up over 120% today so far...it's so tempting to sell! If only if I knew when they were reporting, that would make the decision easier.
Raymond James Analyst thinks that overcapacity is still a big issue. So there is your risk in solar:
http://blogs.barrons.com/emergingma...-problem-raymond-james-says/?mod=yahoobarrons
I just wanted to point out that last year there was about 30 GW's installed. And just a few months ago forecasts for this year were about 29 GW's. Now the forecast for this year is above 35 GW's and growing. Yes, capacity is high (somewhere between 50 GW and 70 GW), but some companies will become profitable (like SPWR) and I expect that trend to continue.
The safest play in solar is buying stocks and not options. Buy and hold and don't look back. If you are worried about risks (which are real) then don't put in too much money into solar.
http://blogs.barrons.com/emergingma...-problem-raymond-james-says/?mod=yahoobarrons
I just wanted to point out that last year there was about 30 GW's installed. And just a few months ago forecasts for this year were about 29 GW's. Now the forecast for this year is above 35 GW's and growing. Yes, capacity is high (somewhere between 50 GW and 70 GW), but some companies will become profitable (like SPWR) and I expect that trend to continue.
The safest play in solar is buying stocks and not options. Buy and hold and don't look back. If you are worried about risks (which are real) then don't put in too much money into solar.
Norse
Active Member
Thank you once again sleepy! I have alot og stocks in it. Some options still tho, I would go for sept rather than aug call, since its unlikely you will get ER before 17th(CSIQ). SOL have their before opening the 15th.
Citizen-T
Active Member
No coincidence that the rise of Solar and the EV are happening at exactly the same time. These two trends are going to feed each other for years to come.
Norse
Active Member
Even though the upside in Tesla is huge, the upside in Chinese solars is even bigger in the short-run. The risk is significantly higher in Chinese solars though, so stick with Tesla if you are risk averse.
Jonathan Hewitt
Active Member
Or put just a little in chinese solar that you could lose and be ok with it but would be fun if it shoots up...that's what I'm doing.
Norse
Active Member
http://www.nasdaq.com/press-release...-2013-earnings-conference-call-20130806-00066
Canadian Solar Inc. ("the Company", "Canadian Solar") (NASDAQ:CSIQ),
one of the world's largest solar power companies, today announced that it will
hold a conference
call
on Thursday, August 8,
2013 at 8:00
a.m. U.S. Eastern Standard Time (8:00 p.m., August 8, 2013 in Hong Kong) to discuss the Company's
second quarter of 2013 results and business outlook.
Read more: http://www.nasdaq.com/press-release...-conference-call-20130806-00066#ixzz2bCBOJ1B1
Canadian Solar Inc. ("the Company", "Canadian Solar") (NASDAQ:CSIQ),
one of the world's largest solar power companies, today announced that it will
hold a conference
call
2013 at 8:00
a.m. U.S. Eastern Standard Time (8:00 p.m., August 8, 2013 in Hong Kong) to discuss the Company's
second quarter of 2013 results and business outlook.
Read more: http://www.nasdaq.com/press-release...-conference-call-20130806-00066#ixzz2bCBOJ1B1
Jonathan Hewitt
Active Member
http://www.nasdaq.com/press-release...-2013-earnings-conference-call-20130806-00066
Canadian Solar Inc. ("the Company", "Canadian Solar") (NASDAQ:CSIQ),
one of the world's largest solar power companies, today announced that it will
hold a conference
callon Thursday, August 8,
2013 at 8:00
a.m. U.S. Eastern Standard Time (8:00 p.m., August 8, 2013 in Hong Kong) to discuss the Company's
second quarter of 2013 results and business outlook.
Read more: http://www.nasdaq.com/press-release...-conference-call-20130806-00066#ixzz2bCBOJ1B1
Seriously CSIQ? Seriously? I just sold my $14 Aug calls yesterday...Oh well, I can't complain about the 66% profit in one week that I booked...
I know right? I sold half of my Aug $17 calls yesterday thinking that the company will not report until after Aug 17; also took a 66% gain. I still have the other half though and some J14 $16 calls as well. I was hoping to load up on CSIQ after TSLA earnings but now it is impossible.
Jonathan Hewitt
Active Member
Yeah, horrible timing! I have some CSIQ stock in my IRA so at least I have some exposure still. I'm glad you still have some options left, I'm all out
I thought about selling half but figured the money would do better in TSLA due to a known ER date as well as the fact that I think I have a pretty good grasp on TSLA as a company and not as much on the solar companies.Similar threads
- Locked
