I simply could not agree more...
Save some timing on offerings and short squeezing, he's too smart to even look at the stock price imo -
well said sleepy
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Articles/megaposts by sleepyhead
- Thread starter sleepyhead
- Start date
I simply could not agree more...
Save some timing on offerings and short squeezing, he's too smart to even look at the stock price imo -
well said sleepy
TSLA is Cheap? Still not Buying
Now that TSLA is in the 140s, it is slowly becoming a bargain again, but I am still not a buyer. Not that I don't like TSLA but I just don't see enough near-term upside in order to get in. I think there is some possibility that the stock goes back into the $150s quickly, but I don't see it going much higher in the near future. At a minimum I would expect a double bottom and there should be another buying opportunity in the 130s. I can also envision a scenario where the stock goes a lot lower from here, and to be honest that is what I am waiting on before I go into TSLA full force. I still have my December bull call spreads, but the stock needs to go up 20% for me to cash in on them. I will hold them to expiration, but I have already written them off as a loss since I don't see TSLA going that high. Let's take an objective view at what is in play for TSLA:
Post ER Sell-Off - Remember that TSLA went as low as $146 a day post ER and that drop looked like it was only the beginning. Then we got news that a second Model S caught fire by running over some road debris, which caused the stock to go down to $132 but now it is back up to $145. What I am trying to say here is that the relief rally may not last too long. Yesterday evening I was thinking that if Tesla were to go down to $100, there would be a dead cat bounce somewhere along the way. This could be that dead cat bounce.
Second Debris Fire - This is not cause for concern as far as safety goes, but rather a cause for concern that Tesla might have to re-engineer the protective shield. This wouldn't be a problem, but a potential recall may be costly if not only to shareholders; bad news = lower stock price, even if actual costs are smallish. Also it might be more difficult to re-engineer while keeping battery swapping capability.
Elon Musk Blog Response - Unless Elon says that he will pay for a recall out of his own pocket, I cannot come up with a scenario where his blog post will do anything but cause the stock to go down (or at least not up by a big amount). Here is how I see the possibilities unfolding:
- Elon says that the car performed as designed and nothing needs to be changed.
- The car needs a recall and the battery shield will be redesigned for future models.
- The car will not be recalled, but future cars will have different shield design. Unlikely outcome IMO.
In either case, I see the stock going down. The market might interpret the first option as "there is risk EV's will catch fire and there is nothing anyone can do about it,". The latter two options will be perceived as costly.
Sentiment Shift - There is a clear sentiment shift with TSLA that started with the first fire and has been getting worse over the past week. There are still many people who believe that that TSLA is worth $60 like in Damodaran's DCF model. There are also a lot of people, who think like me, that there is no upside to purchasing TSLA shares right now, since you will be able to buy them cheaper next week and at worst at the same price next month. Sentiment is clearly bearish and it will take a lot more than one blog post from Elon to shift the sentiment. It might be a while before sentiment shifts to positive; probably not until we get good 2014 guidance as was the case with SCTY.
Market Perceived Growth Rate - This is the major reason why I am not buying any TSLA yet. We all talk here on TMC like Tesla's 100% revenue growth rate is a foregone conclusion and that it will continue for another 3-5 years. But Tesla has not shown that it is growing at that rate and the market needs to see evidence before multiples start expanding again; once again we need good 2014 guidance which will not happen for another 3 months. Let's take a look at actual growth rates:
Q1 4900 cars sold
Q2 5150 cars sold for a 5% growth rate
Q3 5500 cars sold for a 7% growth rate
Q4 6000 cars sold for a 9% growth rate
All this extrapolates into a 30% growth rate and not 100% as we all believe will happen. I believe that Tesla will grow revenues at 100% for at least the next two years, but there is evidence to the contrary and the market might not believe it.
Supplier Constraints - Investors are getting tired of excuses and there is no reason to buy now, when you can buy once the constraints are resolved. The market gave Tesla the benefit of the doubt in Q2, but now it will wait till they are resolved.
VIN Assignment Chart - I believe that this is the reason that TSLA went all the way up to $194. It looked for a while that Tesla was producing 700 cars per week and growing at a very fast pace. Even Wall St. analysts were using this chart to show how fast Tesla was growing. In reality it is producing 20% less cars, hence the 20% lower stock price.
Potential Upside - I believe that we need Q4 guidance before TSLA makes another big move up. On the other hand it seems like Tesla has had a lot of great news coming in post ER in the past two quarters, so I wouldn't be surprised to see more catalysts coming this week and next. But without any catalysts I don't see a need to buy TSLA right now. When that catalyst comes you will know when to get back in.
Potential Downside - There could be a NHTSA investigation or another fire. Just as there are potential positive surprises, there could be negative ones. The problem with negative sentiment is that it will take two or three positive catalysts to have the same affect on the upside as one negative catalyst will have on the downside.
Valuation - If Tesla were a mature company it would need $10b in annual sales, 20% gross margin, 10% net margin, and $10 EPS to justify its valuation. It would have to sell 100k model S/X per year. So that is still 2016 time frame. A lot of growth is already priced in even at a $145 price. Obviously TSLA deserves a growth premium, but since Tesla is only showing a 30% growth rate (QoQ in FY13), that growth premium is likely to decline until it can prove the 100% growth rate. Once again the buy point is the day of 2014 guidance (if around 40k) or supplier constraints are resolved and Tesla is producing at least 700 cars/week. 550-600 cars will not cut it. Many people still believe it is overvalued today.
TSLA's climb will not follow a channel and move gradually towards $1,000. Just look at AAPL's chart and follow the Apple PDF with the timeline. You will see that there were many periods where AAPL would get stuck in the funk at the disbelief of the Apple Investment forum members. Just look at how it hit $270 in Apr. 2010 and how it was still at $240 four months later, before going up 50% to $360 just six months later. I think that you have to pick your battles with these hyper-growth companies and right now the odds favor the shorts. I will get back in when the odds start favoring the longs again; i.e. 2014 guidance and/or supplier constraints resolved and heading towards 800 cars/week.
I still believe that TSLA will double by the end of next year, but I am starting to recognize that we on TMC are willing to give TSLA a much higher multiple since we are true believers. The market doesn't get emotional and it may take a little longer for it to realize TSLA's potential and our price targets may end up being a little too optimistic too soon. I remember reading in the AAPL PDF that the board had price targets that always took a little longer than expected to materialize. Because of this a lot of people ended up buying the wrong OTM options and some lost a lot of money because of this. I was thinking $400 at end of 2014 is doable, but now I am thinking that we are 6 months ahead of the market on TSLA, and unfortunately it will take time for valuation to catch up. At the same time this allows us to buy TSLA while it is still cheap. On the flip side you have to be cognizant that you might be buying in too early and sometimes have to be patient to be able to buy in at a lot lower rate. This is especially true if you are playing options. They might seem cheap today, but I might be buying them a lot cheaper next month if TSLA consolidates from here.
General Market - Even though TSLA is a low-beta stock, there is a real risk that it goes down even further with a potential market pullback that can begin any day now. TSLA is low beta because it defied market gravity when sentiment was positive. It will not have this magic when the sentiment is bearish.
Final Word - As much as I would love to see Tesla make a swift recovery to $170 for my BCS's to finish ITM, I really don't see it happening that soon. I feel that TSLA is heading towards a period of consolidation that may last two to three months. I don't see the upside in buying TSLA right now, so I will be sitting on the sidelines for a while longer. I still feel that solar presents a much better risk/reward profile, especially right now, and I have the vast majority of my funds invested in solar right now.
Solar Bonus - If I had to guess what happens over the next two days, I would say that YGE and HSOL load up the bases tomorrow and then CSIQ hits a grand slam on Wednesday. This is a "just for fun" prediction and the markets can be very fickle and finicky, so nothing will surprise me with solar. Q4 is going to be extremely good for Chinese solar, extremely good! And even if Q3 is only good, I am expecting big guidance and comments from CEO's about the huge solar demand. It truly is an exciting time to be investing in solar and it is only getting better every day. It is actually getting exponentially better on the news front.
Sooner or later the market catches on and it is better to be in sooner than later. I kept buying JASO on weakness over the last few weeks and now it went up crazy on what seemed like a minor piece of news. When a stock is undervalued it will go up crazy on the smallest news. Now imagine if a big piece of news comes out on a company like JASO or SOL. These companies are priced extremely cheaply and it is easy for them to go up. Unfortunately, a lLack of news makes them go down, like is the case for SOL over the past two months. I have been buying a lot of SOL lately on weakness as well. I feel like it will eventually have its day, and it tends to happen a lot sooner than you expect (which is where I might go wrong with TSLA, by waiting too long to get in).
The recent typhoon in the Philippines was the strongest storm on record in the whole world. The cause for it coulb be global warming that could have lead to rising sea temperatures, which in turn leads to stronger hurricanes, a.k.a. typhoons, a.k.a. cyclones. This is a really sad story with tens of thousands losing their lives in this storm alone. This week also happens to be the week of U.N. Climate talks in Warsaw. And the Philippines are pleading for a rapid adoption of renewable energy. This could lead to striking a big deal by 2015, the new deadline established when the previous 2009 deadline was not met for a global climate deal. It is a good time to be investing in renewables and electric vehicles. Solar is going to be a big winner over the next few decades, and the market doesn't even see it coming. Great time to be an investor.
Tearful plea from Philippines delegate as typhoon overshadows opening of UN climate talks - The Washington Post
Now that TSLA is in the 140s, it is slowly becoming a bargain again, but I am still not a buyer. Not that I don't like TSLA but I just don't see enough near-term upside in order to get in. I think there is some possibility that the stock goes back into the $150s quickly, but I don't see it going much higher in the near future. At a minimum I would expect a double bottom and there should be another buying opportunity in the 130s. I can also envision a scenario where the stock goes a lot lower from here, and to be honest that is what I am waiting on before I go into TSLA full force. I still have my December bull call spreads, but the stock needs to go up 20% for me to cash in on them. I will hold them to expiration, but I have already written them off as a loss since I don't see TSLA going that high. Let's take an objective view at what is in play for TSLA:
Post ER Sell-Off - Remember that TSLA went as low as $146 a day post ER and that drop looked like it was only the beginning. Then we got news that a second Model S caught fire by running over some road debris, which caused the stock to go down to $132 but now it is back up to $145. What I am trying to say here is that the relief rally may not last too long. Yesterday evening I was thinking that if Tesla were to go down to $100, there would be a dead cat bounce somewhere along the way. This could be that dead cat bounce.
Second Debris Fire - This is not cause for concern as far as safety goes, but rather a cause for concern that Tesla might have to re-engineer the protective shield. This wouldn't be a problem, but a potential recall may be costly if not only to shareholders; bad news = lower stock price, even if actual costs are smallish. Also it might be more difficult to re-engineer while keeping battery swapping capability.
Elon Musk Blog Response - Unless Elon says that he will pay for a recall out of his own pocket, I cannot come up with a scenario where his blog post will do anything but cause the stock to go down (or at least not up by a big amount). Here is how I see the possibilities unfolding:
- Elon says that the car performed as designed and nothing needs to be changed.
- The car needs a recall and the battery shield will be redesigned for future models.
- The car will not be recalled, but future cars will have different shield design. Unlikely outcome IMO.
In either case, I see the stock going down. The market might interpret the first option as "there is risk EV's will catch fire and there is nothing anyone can do about it,". The latter two options will be perceived as costly.
Sentiment Shift - There is a clear sentiment shift with TSLA that started with the first fire and has been getting worse over the past week. There are still many people who believe that that TSLA is worth $60 like in Damodaran's DCF model. There are also a lot of people, who think like me, that there is no upside to purchasing TSLA shares right now, since you will be able to buy them cheaper next week and at worst at the same price next month. Sentiment is clearly bearish and it will take a lot more than one blog post from Elon to shift the sentiment. It might be a while before sentiment shifts to positive; probably not until we get good 2014 guidance as was the case with SCTY.
Market Perceived Growth Rate - This is the major reason why I am not buying any TSLA yet. We all talk here on TMC like Tesla's 100% revenue growth rate is a foregone conclusion and that it will continue for another 3-5 years. But Tesla has not shown that it is growing at that rate and the market needs to see evidence before multiples start expanding again; once again we need good 2014 guidance which will not happen for another 3 months. Let's take a look at actual growth rates:
Q1 4900 cars sold
Q2 5150 cars sold for a 5% growth rate
Q3 5500 cars sold for a 7% growth rate
Q4 6000 cars sold for a 9% growth rate
All this extrapolates into a 30% growth rate and not 100% as we all believe will happen. I believe that Tesla will grow revenues at 100% for at least the next two years, but there is evidence to the contrary and the market might not believe it.
Supplier Constraints - Investors are getting tired of excuses and there is no reason to buy now, when you can buy once the constraints are resolved. The market gave Tesla the benefit of the doubt in Q2, but now it will wait till they are resolved.
VIN Assignment Chart - I believe that this is the reason that TSLA went all the way up to $194. It looked for a while that Tesla was producing 700 cars per week and growing at a very fast pace. Even Wall St. analysts were using this chart to show how fast Tesla was growing. In reality it is producing 20% less cars, hence the 20% lower stock price.
Potential Upside - I believe that we need Q4 guidance before TSLA makes another big move up. On the other hand it seems like Tesla has had a lot of great news coming in post ER in the past two quarters, so I wouldn't be surprised to see more catalysts coming this week and next. But without any catalysts I don't see a need to buy TSLA right now. When that catalyst comes you will know when to get back in.
Potential Downside - There could be a NHTSA investigation or another fire. Just as there are potential positive surprises, there could be negative ones. The problem with negative sentiment is that it will take two or three positive catalysts to have the same affect on the upside as one negative catalyst will have on the downside.
Valuation - If Tesla were a mature company it would need $10b in annual sales, 20% gross margin, 10% net margin, and $10 EPS to justify its valuation. It would have to sell 100k model S/X per year. So that is still 2016 time frame. A lot of growth is already priced in even at a $145 price. Obviously TSLA deserves a growth premium, but since Tesla is only showing a 30% growth rate (QoQ in FY13), that growth premium is likely to decline until it can prove the 100% growth rate. Once again the buy point is the day of 2014 guidance (if around 40k) or supplier constraints are resolved and Tesla is producing at least 700 cars/week. 550-600 cars will not cut it. Many people still believe it is overvalued today.
TSLA's climb will not follow a channel and move gradually towards $1,000. Just look at AAPL's chart and follow the Apple PDF with the timeline. You will see that there were many periods where AAPL would get stuck in the funk at the disbelief of the Apple Investment forum members. Just look at how it hit $270 in Apr. 2010 and how it was still at $240 four months later, before going up 50% to $360 just six months later. I think that you have to pick your battles with these hyper-growth companies and right now the odds favor the shorts. I will get back in when the odds start favoring the longs again; i.e. 2014 guidance and/or supplier constraints resolved and heading towards 800 cars/week.
I still believe that TSLA will double by the end of next year, but I am starting to recognize that we on TMC are willing to give TSLA a much higher multiple since we are true believers. The market doesn't get emotional and it may take a little longer for it to realize TSLA's potential and our price targets may end up being a little too optimistic too soon. I remember reading in the AAPL PDF that the board had price targets that always took a little longer than expected to materialize. Because of this a lot of people ended up buying the wrong OTM options and some lost a lot of money because of this. I was thinking $400 at end of 2014 is doable, but now I am thinking that we are 6 months ahead of the market on TSLA, and unfortunately it will take time for valuation to catch up. At the same time this allows us to buy TSLA while it is still cheap. On the flip side you have to be cognizant that you might be buying in too early and sometimes have to be patient to be able to buy in at a lot lower rate. This is especially true if you are playing options. They might seem cheap today, but I might be buying them a lot cheaper next month if TSLA consolidates from here.
General Market - Even though TSLA is a low-beta stock, there is a real risk that it goes down even further with a potential market pullback that can begin any day now. TSLA is low beta because it defied market gravity when sentiment was positive. It will not have this magic when the sentiment is bearish.
Final Word - As much as I would love to see Tesla make a swift recovery to $170 for my BCS's to finish ITM, I really don't see it happening that soon. I feel that TSLA is heading towards a period of consolidation that may last two to three months. I don't see the upside in buying TSLA right now, so I will be sitting on the sidelines for a while longer. I still feel that solar presents a much better risk/reward profile, especially right now, and I have the vast majority of my funds invested in solar right now.
Solar Bonus - If I had to guess what happens over the next two days, I would say that YGE and HSOL load up the bases tomorrow and then CSIQ hits a grand slam on Wednesday. This is a "just for fun" prediction and the markets can be very fickle and finicky, so nothing will surprise me with solar. Q4 is going to be extremely good for Chinese solar, extremely good! And even if Q3 is only good, I am expecting big guidance and comments from CEO's about the huge solar demand. It truly is an exciting time to be investing in solar and it is only getting better every day. It is actually getting exponentially better on the news front.
Sooner or later the market catches on and it is better to be in sooner than later. I kept buying JASO on weakness over the last few weeks and now it went up crazy on what seemed like a minor piece of news. When a stock is undervalued it will go up crazy on the smallest news. Now imagine if a big piece of news comes out on a company like JASO or SOL. These companies are priced extremely cheaply and it is easy for them to go up. Unfortunately, a lLack of news makes them go down, like is the case for SOL over the past two months. I have been buying a lot of SOL lately on weakness as well. I feel like it will eventually have its day, and it tends to happen a lot sooner than you expect (which is where I might go wrong with TSLA, by waiting too long to get in).
The recent typhoon in the Philippines was the strongest storm on record in the whole world. The cause for it coulb be global warming that could have lead to rising sea temperatures, which in turn leads to stronger hurricanes, a.k.a. typhoons, a.k.a. cyclones. This is a really sad story with tens of thousands losing their lives in this storm alone. This week also happens to be the week of U.N. Climate talks in Warsaw. And the Philippines are pleading for a rapid adoption of renewable energy. This could lead to striking a big deal by 2015, the new deadline established when the previous 2009 deadline was not met for a global climate deal. It is a good time to be investing in renewables and electric vehicles. Solar is going to be a big winner over the next few decades, and the market doesn't even see it coming. Great time to be an investor.
Tearful plea from Philippines delegate as typhoon overshadows opening of UN climate talks - The Washington Post
Man every time I read your post I second guess. I really was wondering about how to play CSIQ if there's still room to run with ER on wed. I bought TSLA and am starting to regain my losses on my ER plays.
What are you doing for CSIQ ER if anything? Them preannoucing made me think of a SCTY scenario, I am trying to see if their management likes to give guidance. Thoughts? Maybe I missed something.
What are you doing for CSIQ ER if anything? Them preannoucing made me think of a SCTY scenario, I am trying to see if their management likes to give guidance. Thoughts? Maybe I missed something.
Sleepy...;Thanks for your mega post. It does appear that solar has more short term (days, weeks), medium term (weeks, months) than TM at this point. I still have some LEAPS and a little TM stock but more in solar, and some 'cash' that I am having 'analysis-paralysis' issues in determining proper stock purchases. I would like to commit this money to TM but I do not trust the near term price as a good time to renter.
Last edited:
If you are happy with your ER play then don't change it because of me. My ER plays have not been huge successes in the past, but I know that I will hit a home run every now and then that will more than offset my strike outs. That is just a strategy of mine that makes sense for my investment purposes and can't recommend it to others though.
CSIQ is still really freaking cheap no matter how you look at it. Once you start factoring in forward earnings, as in 2014 EPS and revenue, then you are looking at a joke of a share price even at $30. The problem is that the market might take longer to figure this out, but that is why I always recommend to buy and hold. Those who bought JASO at $11, then $10, and then more at $9 in just the last month must be feeling really smart right now; I know I am.
Buy and hold.
I have no doubts about CSIQ ER. I have seen some saying that if guidance is weak, then the stock might fall post ER. That person must not have done enough research on the company, because if you do enough research then you should know exactly what kind of guidance to expect; and it should be good. Stock prices are not all about guidance anyway, they are mostly about macroeconomic factors and to a lesser, but still significant, degree - company and industry specific factors.
Just a note to all of the options players: I really don't think you all should be asking others for opinions when to close out your positions. Nobody can tell when the best time will be and it has to be 100% up to you. Don't let others influence your decisions or don't play options at all. Remember that any advice you get on closing out positions will almost always be wrong, because there is always a better time or strategy.
Remember that SCTY went from $52 to $28, or nearly 50% down before regaining its mojo (with 2014 guidance nonetheless). TSLA is still only down 30% and can still go down a lot lower before it goes up.
Jonathan Hewitt
Active Member
Haha, sleepy I think you just solidified all my recent thoughts. I've had a lot of the same thoughts as you which started to form after the drop from $194.50 and are pretty concrete after you eloquently put everything together. I've been looking at my gains and my solar is acting like TSLA did for me earlier this year, except solar doesn't look like it's stopping any time soon. For some reason I still have 40% of my portfolio in TSLA (was much more before the drop). I think there's two reasons why I am still heavily in TSLA and I will list them in case other people are in the same boat. First, I think I want to root for TSLA and "support it" by owning a relatively large amount of it, even if short to medium term gains possibly have a poor risk/reward ratio. This obviously doesn't make sense financially but people getting emotionally tied to a stock happens all the time. Second, and perhaps the bigger issue, I got in TSLA in the 30s and really don't want the tax man to steal a large percentage of my gains before they are long term. I've already been bumped up a tax bracket this year thanks to TSLA. I know you shouldn't make investment decisions solely on tax issues but when you have such a large amount of gains it is hard not to.
My LEAPS don't go long term until May so I think I'm selling them tomorrow. I'm definitely going to keep some TSLA as a long term investment but need to think about if I want to keep all my shares or not.
My LEAPS don't go long term until May so I think I'm selling them tomorrow. I'm definitely going to keep some TSLA as a long term investment but need to think about if I want to keep all my shares or not.
I believe this was direct at me and that is fine, but i just wanted to lay my cards out. As you said everyone is free to do what they want and i expressed my opinion on the subject matter. The street has been real, for the lack of a better term, bitchy as of late. I do agree that CSIQ is on the positive side going into ER but the beating I have taken this ER season has made me weary of holding such a large, short term holding. I expressed my concerns on the fact that is seems like just about nothing gets a win this ER season and i have paid for it so far, so i will gracefully bow out at the expensive of being wrong and missing out, but locking in gains. Just like i was with SPWR. Pulling out of SPWR was a good move on the ER reaction, but it could turn out to be a net equal as SPWR recovers, no big deal. Not saying my pull out of CSIQ is the right move, just saying it was the safe move for me. I am still heavily invested in CSIQ, I just didnt want to risk my short term options and their major gains.
Norse
Active Member
Analysts follow CSIQ, and I am pretty sure whatever happens in Q3 ER they will have a PT raised afterwards.
Agree with much of sleepy's post and have a substantial solar position. At the same time, I'll point out that sleepy's own advice about solar (buying on bearish sentiment) is the opposite of selling TSLA here. He's saying he's not adding currently. I think TSLA might go lower as well, but if you are buying stock or LEAPS, bearish market is exactly when you should buy albeit slowly if you agree the catalyst will be later than sooner. Waiting until the sentiment is bullish on a stock that has already established much greater highs will be too late. I would advise keeping and slowly adding long term position while TSLA is stuck in bear mode, just as sleepy recommended for solar stocks, that time is now and over the next weeks for TSLA In this respect I probably disagree some with sleepy, although I do agree it may revisit the $120-$130 , the other side of current bearish sentiment is very much higher, when it switches it will be fast
I agree with this. I didn't mean to say that now is not a good time to buy TSLA; it probably is. It is not a good time for me, because I think the short term favors solar, and I believe that I will be able to buy TSLA at a similar price a few weeks from now.
If you are looking to buy more Tesla on this dip then definitely buy some now and be ready to be buy more if it goes down further. I would be buying right now, but I think that solar is at an inflection point and I don't want to miss out. The main reason I am not buying TSLA is that I believe there will be a consolidation period and I am looking to buy options, which can become a lot cheaper in the next few weeks. If I was looking at shares, I would have bought in the 130s for sure. I just like the solar risk/reward ratio on shares that much more. I know that a consolidation period will make TSLA options a lot cheaper and I am patient.
There is a good chance that TSLA will shoot up and I will miss out on this bargain, but I play the odds and they are currently favoring a period of weakness.
And this does not contradict to what I recommend with solar: solar is a growing industry that is "undervalued", so you have to buy on every big dip. TSLA is a growing company that is "overvalued" so you have to be more careful on the dips. Buying the dips is obvious when nothing changes. But it looks like sentiment has changed and now buying the dips is not an obvious thing. If solar has a weak Q3 and gives weaker than expected guidance, then buying the dips will not be as obvious anymore either. Every stock requires a different strategy.
- - - Updated - - -
I never said to sell TSLA here, if you held on for so long then selling at the bottom is probably the worst thing you can do. If I were an analyst it would probably equate to a short-term "hold" rating.
Jonathan Hewitt
Active Member
Agreed, but I also think that sleepy doesn't have a core long term TSLA position. I DO think my TSLA stock and LEAPS will do very well over the next year or two but for the forseeable future I don't see them doing better than solar. I only have so much capital and I think it makes sense to put it where I can have the best return. I'm also using some margin right now and I don't think it is very safe using on highly volatile stocks like TSLA and solar so I should sell something. At a minimum I think it's coming down to my TSLA LEAPS. I'll for sure maintain some stock assuming I don't decide to keep all of it and I have some stock in my IRA for long term purposes.
EDIT: Ok, sleepy actually straight up said he didn't say to sell. I still think I'm selling my LEAPS but am leaning towards keeping all my stock.
Last edited:
Looks like HSOL and YGE both swung and missed.
HSOL is getting pummeled in pre-market on a huge miss that was due to a one time charge related to writing off deferred tax assets. Guidance was great with 13%-19% shipment growth rate QoQ. Some companies get excused from having one-time charges and others don't.
YGE had results that came in-line with expectations. Their gross margin increased by 2% to 13.7%. YGE is giving back yesterday's gains in pre-market though. YGE is a loser because it has way too much debt. It isn't anywhere near profitability with 14% GM, whereas SOL and CSIQ would be profitable with that GM. YGE needs 20%+ GM to become profitable and that is why I do not invest in them. Interest expense is eating away all of their profits and there is nothing they can do about it.
There is a reason that I don't invest in these two companies, and it is unfortunate that these two are leading off the earnings season for Chinese solar companies. It looks like they are going to drag the entire sector with them today.
Fortunately CSIQ is reporting tomorrow and I think their results will be much better. Just today they announced two new module supply agreements, one in Turkey for 2.3MW (which is like 30% of total Turkey installations) and a 32MW supply agreement in China that will be delivered this month. This is great news, since it adds another 32MW to Q4 guidance on top of the 100MW deal they announced last week in China. We know CSIQ had a great Q3 and it looks like Q4 is looking really promising as well. It's too bad they won't give 2014 guidance, because next year is looking really good for them.
I am going bargain hunting for solars today. All of the losers have reported and I am optimistic about CSIQ's results tomorrow and JKS and TSL next week. My favorite picks have yet to report, while the others are out of the way:
CSIQ
JASO
SOL
JKS
and
TSL - probably a good one, but I don't invest in them.
HSOL is getting pummeled in pre-market on a huge miss that was due to a one time charge related to writing off deferred tax assets. Guidance was great with 13%-19% shipment growth rate QoQ. Some companies get excused from having one-time charges and others don't.
YGE had results that came in-line with expectations. Their gross margin increased by 2% to 13.7%. YGE is giving back yesterday's gains in pre-market though. YGE is a loser because it has way too much debt. It isn't anywhere near profitability with 14% GM, whereas SOL and CSIQ would be profitable with that GM. YGE needs 20%+ GM to become profitable and that is why I do not invest in them. Interest expense is eating away all of their profits and there is nothing they can do about it.
There is a reason that I don't invest in these two companies, and it is unfortunate that these two are leading off the earnings season for Chinese solar companies. It looks like they are going to drag the entire sector with them today.
Fortunately CSIQ is reporting tomorrow and I think their results will be much better. Just today they announced two new module supply agreements, one in Turkey for 2.3MW (which is like 30% of total Turkey installations) and a 32MW supply agreement in China that will be delivered this month. This is great news, since it adds another 32MW to Q4 guidance on top of the 100MW deal they announced last week in China. We know CSIQ had a great Q3 and it looks like Q4 is looking really promising as well. It's too bad they won't give 2014 guidance, because next year is looking really good for them.
I am going bargain hunting for solars today. All of the losers have reported and I am optimistic about CSIQ's results tomorrow and JKS and TSL next week. My favorite picks have yet to report, while the others are out of the way:
CSIQ
JASO
SOL
JKS
and
TSL - probably a good one, but I don't invest in them.
HSOL getting hammered. I have no money in this company. Since it appears that it may be down 20% today and the problem seems to be the one time charge with an otherwise good ER do you think it is a good buy on this major dip. It would appear so to me as a speculative play.
- - - Updated - - -
Just finished reading their 2013Q3ER...think I will stay away from this one.
I just wrote about them, because they are the first two Chinese solar companies to report earnings for Q3. Now that the losers are out of the way, the real fun will begin with CSIQ tomorrow.
Was that just the favorites of those that hadn't reported yet or has SPWR dropped off your list?
SPWR is still the safest bet in solar (if there ever was one). I am talking about Chinese solar companies only here; I mentioned Chinese solar in the other part of the post you did not include in the quote. I will be buying a lot of SPWR options if it continues to consolidate and IV goes down. I am patient and I can wait.
Ah, sorry. For whatever reason, it struck me as the start of a new thought when you started the paragraph about hunting for solar bargains rather than a continuation of the analysis on the Chinese companies. That and I don't really think of CSIQ as a Chinese solar, though I suppose it basically is. My brain's fault, but I'm glad I asked
Similar threads
