Norse
Active Member
I have maybe asked u this before, but since u seem to follow solar Close, what other than sunpower Stock do u recommend?
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I have maybe asked u this before, but since u seem to follow solar Close, what other than sunpower Stock do u recommend?
Well, you called it. SPWR up 10.24% today, FSLR and SCTY near 2%. I sat and watched on my phone thinking "Somebody said this was going to happen."
I would like to be invested in SolarCity. I like that they are a play on Solar without the risk of being in the solar panel manufacturing business.
But I just cannot bring myself to pay for a stock that is trading at over 10X revenue.
Market Cap is about $2.9 billion.
Sales revenue for 2014 is about $200 million to $270 million.
That is really expensive. I realize it is growing fast and might grow into that valuation, but the stock does appear to be priced very expensively.
But I just cannot bring myself to pay for a stock that is trading at over 10X revenue.
Market Cap is about $2.9 billion.
Sales revenue for 2014 is about $200 million to $270 million.
That is really expensive. I realize it is growing fast and might grow into that valuation, but the stock does appear to be priced very expensively.
Jonathan Hewitt
Active Member
So I put in a sell order on Wednesday last week to sell some mutual funds in my Roth IRA with the intent to buy SCTY and SPWR with the money. I put the order in too late for the mutual fund selling to happen until COB Friday, AFTER SPWR went up 10%. Now I get to decide whether to wait for a dip or just buy now and not look at it for a couple years, haha.
I have done a bit of research on solar and came to the conclusion that SPWR was the safest and best pick, therefore up until recently I held virtually 100% of my money in SPWR; after the 400% run-up, I decided to "diversify" and bought a bunch of TSLA since I realized that it is actually a safer pick than SPWR, albeit with smaller return potential (at least in the short-run). Recently I bought a little bit of SCTY after it pulled back into the mid 30s, but whereas SPWR is undervalued, SCTY is overvalued so I think SPWR still offers the better risk/return profile.
I don't believe in FSLR because they are basically a pure power plant builder, and their panels are not very efficient. With their $4/share EPS and $40 stock price the market is valuing this company like a mature company and I think they got it right. Plus other more efficient Chinese panels are catching up in price with FSLR and I can see FSLR as potentially going bankrupt in 5-10 years. They do have the strongest balance sheet in the industry though. They also recently purchased a startup called Tetrasun which supposedly has the technology to build very efficient panels at a low cost to compete in the rooftop segment and to compete with SPWR, SCTY, etc. This technology is not proven though: if it works it will be great, if it doesn't then the company is toast in the long-run.
SUNE - Sun Edison (Formerly MEMC Electronic - WFR symbol). I haven't done much research on this one, but I have a feeling it might be a winner too based on a gut instinct. I will stick with SPWR though.
High risk/high reward pick is RSOL or Real Goods Solar. They have a similar model to SCTY but with a $70m market cap vs. $2.9b market cap of SCTY. They are on the verge of missing a debt payment which is small and can put them into bankruptcy. But I have a feeling they will get financing from some bank and it will become a non-issue. Don't really know hardly anything on this company, but it has potential to be a 10 bagger if everything goes right. Highly speculative play. If anyone does research on this company please report back to me.
Wild Card - Chinese Solar stocks. I have a feeling that these stocks are about to take off and yield huge returns. Some companies like Canadian Solar CSIQ have already gone up 400% or more in the past few months; but is still cheap. The problem I have with Chinese Solar is that I bought into a few stocks a couple of times and always ended up not making any money. It is hard to say if they already bottomed, but if you have a 10 year time horizon then it might be worth putting some money in Chinese Solar today. They might have already bottomed, but it is impossible to tell. I can also envision a scenario where I buy some Chinese Solar only to watch them stand in place while SPWR and TSLA continue going up. It is all about timing with these stocks, but they are very cheap.
As it stands I still have more than half my money in SPWR, a big chunk in TSLA and a smaller position in SCTY. I will rebalance my portfolio based on price movements. E.g. if Spwr goes up another 50% and SCTY goes down 50%, I might put all my money in SCTY. I am not afraid to take risks though. Diversification is for those who don't know what they are doing or for those that have too much money (read: $millions) to risk losing it all. Problem with my stock picks is if we hit a recession then these stocks will tank more than the market. But I think that the US economy is only starting to take off and is on the verge of doing very well.
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I bought some SPWR last week at $21.10 and then more at $22. Earned more than 10% in two days on those purchases, even though I wasn't sure if the run-up will continue just like you. I pulled the trigger because I figured that after earnings are released in a month or so the stock will be way higher than $22 anyway (note that I am bullish on their earnings but if they do disappoint then the stock will tank). I am glad that I pulled the trigger, but at $24.50 I am not sure if I would pull the trigger that easily. The stock has run up 40% in the past week or so and it will correct eventually.
SCTY has not had a big run up in the past week though, so if you are looking at a long-term investment then it might be a good time to buy. Remember though that I personally cannot recommend this stock because I don't know how to value this company. You are betting on continued growth (which will happen) and continued high valuations (which will continue in a bull market, but not if we hit a recession).
Just last week someone posted a very similar question after the stock went up from $17 to $20. He was wondering if he should get in now or wait for a pull-back? I told him in the long run $20 is a good bet, but in the short run it has hard to tell when a correction is coming. I hope he bought at $20.
I have been pushing this stock since a couple of weeks ago when it fell to $17-$18, and I was very confident it was undervalued back then. At $24, it will have to beat guidance and analyst estimates this quarter in order to continue its rise. I think that it will, but I could be wrong. If they only meet guidance for the rest of the year then the stock is probably fairly valued at $24.
My investment thesis in SPWR is that this is only the beginning and it is only starting to take off. Last year when it was trading in the single digits $, I told my friend that it is going up to $50 in 3-4 years. He kept watching it go up and finally bought in at $13, which was basically the top. He watched it go down to $9 but held on and today is reaping the benefits.
Now I think that the stock will reach $50 within the next 12 months. If there is some "irrational exuberance" (like with Tesla) in solar stocks in the near future (like there was in 2008), then I can easily see SPWR going up to $100 - $200 in 2 - 3 years. Note that this scenario is not very probable, but I still see it as a small albeit realistic possibility.
I think that Solar is only starting to take off. Look at all the "experts" that keep bashing the industry, this is a good contrarian indicator just like with Tesla 3 months ago. Once everyone becomes bullish on solar will it be time to sell. I put my money where my mouth is, so if I am wrong then I will feel (probably much more than) your pain too.
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It was European tariffs on Friday. Rumor is that Europe and China are making progress in negotiations to agree on a minimum selling price in Europe. China supposedly proposed $0.65 even though some make and sell (at a loss) below $0.50 right now. Rumor is that Europe will seek a higher price than $0.65 though.
No matter the solution in Europe, it will be good for Sunpower. If you have to pay higher prices for Chinese panels then you might as well buy highest quality Sunpower panels, especially since they are coming down in costs quickly. Lets say that Europe and China settle on a minimum price of $0.70; sunpower can probably reach those prices (at least as far as cost to produce goes) in a couple of years and become a no-brainer choice.
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Jonathan Hewitt
Active Member
Thanks for your advice! It's my IRA and I'm only 27 so now's the time for me to be a bit more risky.
Bardlebee
Member
Jonathan Hewitt
Active Member
I got in this morning at $24.16 for SPWR and $39.31 for SCTY. Even though SPWR went down a little today I feel relieved for finally pulling the trigger and buying. It's my IRA so I'm taking the long term view (and not trying to get too happy about SCTY's awesome rise today).
Norse
Active Member
I actually bought some more SPWR today as well. A few hundred shares at $23.62.
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It's good to be investing in both companies. They will both do well in the long run, but if one is outpacing the other than it might be prudent to shift some money to the underperformer. I am actually doing this now with SPWR and TSLA. I shift money back and forth; when one of the stocks corrects I put more money into that one if the other one performed well recently. I do this in my 401k though, so I don't have to worry about taxes. In my personal accounts it is buy and hold for now.
Germany Sets 23.9 GW Solar Power Generation Record! | Inhabitat - Sustainable Design Innovation, Eco Architecture, Green Building
Green Energy Technology June revenues hit 20-month high
This might explain why Solar City rallied into the close.
Green Energy Technology June revenues hit 20-month high
This might explain why Solar City rallied into the close.
Bloomberg video with SunPower CEO Tom Werner:
http://www.bloomberg.com/video/sunp...omenal-t7TE8MMkQ~~n_M6W4D0pUA.html?cmpid=yhoo
Lots of interesting information!
http://www.bloomberg.com/video/sunp...omenal-t7TE8MMkQ~~n_M6W4D0pUA.html?cmpid=yhoo
Lots of interesting information!
Here is another Bloomberg article with a lot of interesting quotes from SunPower CEO as well as some Analysts:
Cheapest Solar Panels No Longer Best, SunPower CEO Says - Bloomberg
Cheapest Solar Panels No Longer Best, SunPower CEO Says - Bloomberg
Very interesting Bloomberg interview with Baird Analyst Ben Kallo. Download the audio file and listen:
http://www.bloomberg.com/news/2013-...r-investors-are-upbeat-audio-.html?cmpid=yhoo
http://www.bloomberg.com/news/2013-...r-investors-are-upbeat-audio-.html?cmpid=yhoo
Bardlebee
Member
I have some good shares in SCTY at 11, I was thinking of dipping into SPWR. What price point do you guys think would be a smart move to buy some shares in this company? Should I purchase if it drops to 20 or do you think that is going to even happen at this point?
Earnings are about 3 weeks away and there is no way the stock is going down to $20 before earnings without some kind of big correction in the market. If you think the market will correct in the next 2 or 3 weeks then wait before getting in.
I think the time to buy SPWR was yesterday when it dipped to $23 a day after reaching a new 52-week high of $25.30. I bought in yesterday and think there is a better chance that the stock will be above $25 by earnings than below $20.
That said the market has had a 4 day winning streak so it is bound for a down day or two in the next few days.
Read a bunch of the links littered around these parts and your very helpful posts yesterday. I'm in at $23.19 in my Tax-free account.
Sleepyhead,
Thanks so much for your posts on SPWR. With the expected strong second half of 2013 as hinted by the CEO, where do you see SPWR in terms of stock price at the end of the year, barring any major recession or black swan type events?
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