Alternative Energy Investor Discussions

[sleepyhead]

FWIW, I am extremely bullish on SPWR and all solar stocks going into ER (no, this is not an invitation to start buying Nov. call options like crazy). I have done a ton of qualitative research and this quarter has to be really good for everyone.

The only way SPWR goes down after earnings is if they have incompetent management.

 

[sleepyhead]

SPWR Earnings Today after Market Close

SPWR is announcing earnings today after market close. The stock is up 100% since I started recommending it here in June. I know that a lot of people here have been spoiled by TSLA, but just wanted to remind you guys that stocks don't normally double in a few short months. The average time it takes a stock to double is 7-10 years.

I am very excited to learn what kind of growth strategy they have come up with. I have posted my Q3 earnings preview article this morning with link below.

I can't imagine another Q2 happening. For those with short memories, Q1 was the exact opposite and SPWR doubled in a month after Q1 earnings. The stock has also rebounded 70% after the 25% post Q2 decline.

This is a testament to how irrational the markets can be. That is why I always recommend to buy and hold solar stocks if you are interested in investing in the sector.

 

[Zaxxon]

Thanks for the preview, sleepyhead.

Some news out of CSIQ this am:

http://investors.canadiansolar.com/phoenix.zhtml?c=196781&p=irol-newsArticle_print&ID=1870012

Canadian Solar Receives CAD$104 Million Non-Recourse Construction Loan from Deutsche Bank

GUELPH, Ontario, Oct. 30, 2013 /PRNewswire-FirstCall/ -- Canadian Solar Inc. (the "Company", or "Canadian Solar") (NASDAQ: CSIQ), one of the world's largest solar power companies, today announced it has signed a financing agreement pursuant to which Deutsche Bank has agreed to provide CAD$104 million in non-recourse, short-term construction financing to Canadian Solar for the construction of solar power projects in Ontario, Canada. The loans are expected to be repaid with the proceeds of the sale of the respective financed projects.

The loan facility is intended to support the simultaneous construction of 3 solar power plants, totalling 30 MWac. Developed by Canadian Solar, the projects are expected to be built and connected through 2014. All of the projects have been awarded a 20-year power purchase contract (the "FIT Contract") by the Ontario Power Authority under the Ontario's Feed-In-Tariff Program.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, said, "This is the second construction loan package we have signed with Deutsche Bank. We thank Deutsche Bank for its continued partnership, which underscores the strength of our Tier 1 position in the solar industry and our prospects for profitable growth. The support of global financial institutions, like Deutsche Bank, allows us to expand our actionable pipeline of the quality projects which our investors would like to acquire."

 

[Gtoffo]

The only way SPWR goes down after earnings is if they have incompetent management.

I totally agree. If they didn't get the message after the last earnings they never will. However I don't know enough about panel manufacturing and I worry that increasing capacity might be a harder problem than we think it is. They might need more time to put the pieces all together. Wouldn't they have announced any major expansion plan before the earnings call? Does it make any sense to wait until now with any major announcement?

Still I would be shocked if they won't at least announce some future roadmap or something similar (at that point the market would be justified to just kill the stock). Of course even if they announce something the market might still not like the timeframe of their plan and tank anyway.

 

[sleepyhead]

I totally agree. If they didn't get the message after the last earnings they never will. However I don't know enough about panel manufacturing and I worry that increasing capacity might be a harder problem than we think it is. They might need more time to put the pieces all together. Wouldn't they have announced any major expansion plan before the earnings call? Does it make any sense to wait until now with any major announcement?

Still I would be shocked if they won't at least announce some future roadmap or something similar (at that point the market would be justified to just kill the stock). Of course even if they announce something the market might still not like the timeframe of their plan and tank anyway.

This is all true, but they said on last CC that they might have an answer on this CC.

 

[fjm9898]

price action on SPWR is looking very weak.

 

[ongba]

price action on SPWR is looking very weak.

I wouldn't read too much into it (unless somehow, there is an earnings leak). The markets, for the most part, are down today, along with most of the high fliers and all of the solar sector. Let's see what earnings and guidance look like later today.

 

[ckessel]

Once again, every solar is getting crushed pretty heavily. Every solar stock of the 6 or so I checked is lower than it was a month ago, except CSIQ despite also being down lately. My December SOL 6's actually have zero value now , no bids in a while and the ask is a shiny nickel.

 

[sleepyhead]

Once again, every solar is getting crushed pretty heavily. Every solar stock of the 6 or so I checked is lower than it was a month ago, except CSIQ despite also being down lately. My December SOL 6's actually have zero value now , no bids in a while and the ask is a shiny nickel.

I don't know what chart you are looking at but on the 1-month chart SPWR is up 25% and CSIQ is up 35%. JASO, SOL, and JKS almost at break even, only down 5% - 10%.

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I wouldn't read too much into it (unless somehow, there is an earnings leak). The markets, for the most part, are down today, along with most of the high fliers and all of the solar sector. Let's see what earnings and guidance look like later today.

I wouldn't read into it either.

 

[fjm9898]

My December SOL 6's actually have zero value now , no bids in a while and the ask is a shiny nickel.

That is because everyone else knows its junk. i hope you paid very little for it and are a lucky SOB when it comes to earnings.

 

[ongba]

Once again, every solar is getting crushed pretty heavily. Every solar stock of the 6 or so I checked is lower than it was a month ago, except CSIQ despite also being down lately. My December SOL 6's actually have zero value now , no bids in a while and the ask is a shiny nickel.

ckessel,

volatility is is the norm in the solar sector, so it is expected to fluctuate greatly. I would strongly take sleepy's advice when it comes to investing in solar: either buy shares or LEAPS. The closest expiration I have in solar is march 2014 for jks (which I bought recently before the June expiration became available) and I am nervous holding them, as I would like to roll to June as soon as possible.

 

[sleepyhead]

Once again, every solar is getting crushed pretty heavily. Every solar stock of the 6 or so I checked is lower than it was a month ago, except CSIQ despite also being down lately. My December SOL 6's actually have zero value now , no bids in a while and the ask is a shiny nickel.

ckessel, I am sorry for all of your paper losses. I still think there is a tiny chance for you to recover on some of your options. It will require a blowout from SPWR to begin with.

If you don't recover, then I am going to use you as a case study why it is a bad idea to buy options in solar. That is why I have been recommending shares, or LEAPS if you really want to go the options route. Unfortunately, hardly any of the solars offer LEAPS, or are prohibitively expensive.

 

[ckessel]

I don't know what chart you are looking at but on the 1-month chart SPWR is up 25% and CSIQ is up 35%. JASO, SOL, and JKS almost at break even, only down 5% - 10%.

Didn't look at SPWR, yea it's up.

Otherwise, all down from 30 days ago. Some down by not much as you noted, but negative.

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If you don't recover, then I am going to use you as a case study why it is a bad idea to buy options in solar. That is why I have been recommending shares, or LEAPS if you really want to go the options route. Unfortunately, hardly any of the solars offer LEAPS, or are prohibitively expensive.

Well, recover or not, probably still a good example.

What hurts is it's nearly everything that's been hit and it all went south at almost exactly the same time starting ~3-4 weeks ago, which is precisely when I tried to diversify out of just TSLA stock. It's the conjunction of all stocks dropping and all doing it at the same time that's been the killer. Even if they'd all dropped, if it'd been more staggered some options would have been ok, some bad, some I could have reallocated. I'd still have losses, but the conjunction of the timing really magnifies it.

 

[fjm9898]

With a few bad treads and the solar hit i am only a few ks above where i started 6 months ago. My only Green right now is solars though. (options portfolio)

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SPWR beats, very little AH action, people might be waiting for the CC to make any major moves. (talking about volume)

 

[Mario Kadastik]

Sunpower (NASDAQ: SPWR) reported Q3 EPS of $0.44, $0.19 better than the analyst estimate of $0.25. Revenue for the quarter came in at $657 million versus the consensus estimate of $583.24 million.

Sunpower sees Q4 2013 EPS of $0.15-$0.35, versus the consensus of $0.28. Sunpower sees Q4 2013 revenue of $675-725 million, versus the consensus of $723.3 million.

That to me is a nice beat, but weak guidance... So the result might be mixed and probably means indeed everyone is waiting for the CC.

 

[fjm9898]

Ya lets hope. Its not even back over how much it lost today.

 

[Jonathan Hewitt]

The way I understand it is it sounds like SPWRs biggest issue is this fab plant won't be fully online for a while. They will be able to increase capacity some but are mostly going to be production constrained most of 2014.

 

[fjm9898]

The way I understand it is it sounds like SPWRs biggest issue is this fab plant won't be fully online for a while. They will be able to increase capacity some but are mostly going to be production constrained most of 2014.

Yup, which is exactly what i said i saw happening. I dumped most of my options mid day today, kept my Jan 15 LEAPS.

 

[DaveT]

Alright guys, here's SPWR's Q3 earning call transcript:
SunPower Corporation (SPWR): SunPower Management Discusses Q3 2013 Results - Earnings Call Transcript - Seeking Alpha

SPWR Q3 earnings slides: http://investors.sunpowercorp.com/common/download/download.cfm?companyid=SPWR&fileid=701503&filekey=95e5eaa2-7ee0-4873-a9f8-61c14ad3f68d&filename=Q3%202013%20Supplementary%20Slides%20Final.pdf

SPWR Q3 supplemental data: http://investors.sunpowercorp.com/common/download/download.cfm?companyid=SPWR&fileid=701504&filekey=1e1a2208-5507-4557-82db-f324cc96c548&filename=Q3%202013%20Supplementary%20Metric%20Sheet%20Final.pdf

Here's my quick take. I thought it was okay to pretty good. Their Q3 results were impressive and their FY 2013 non-GAAP estimates of $1.30-1.50 eps is impressive. The challenge with SPWR (and other manufacturers) is that it's difficult to ramp production quickly. It's going to take them 3 years to ramp for 1.2 GW capacity to 1.6 GW capacity. The growth investor will likely want to see more aggressive ramping than that since their revenues will likely track their capacity. 2014 guidance seems very similar to this year. So, again the exciting ramping of growth is missing. Overall though, SPWR is positioning themselves as a very strong player in the U.S. and global solar market. They have a strong pipeline and have lots of cash on hand to fund their growth. The challenge is with limited capacity ramping ability it's difficult to give them a high growth P/E multiple.

 

[ckessel]

So it looks like SPWR is a year or two away from any real stock growth.