Sorry, but you missed a fundamental point. Stocks don't trade at P/B of 1. S&P 500 trades at a P/B of approx 3.
Not even utilities that grow at a rate of 2% trade at a P/B of 1. They trade at a P/B of around 1.7 to 2.
I believe this is where the fundamental disconnect is. SPWR gets wholesale prices for it's electricity. SCTY gets retail prices.
In my own electric bill the difference is a factor of 3X
(supply charges vs delivery charges vs total charges is 1:2:3)
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Cash raised through debt should have zero effect on Book Value (because cash will come on the asset side and debt will go on to the liability side).
To discount away the equity issuance: we can subtract the $181mil raised through equity. So it's $804mil - $181mil at end of 2013 vs 280mil at end of 2012. That's still a growth of 122.5%
To be honest I would be surprised if the GW deployment doubles and shareholder value doesn't.
Why wouldn't it?
If anything they are growing Retained Value at a faster pace than MW deployment (because of dramatic cost reductions). So I expect shareholder value to increase at 100% pace or stronger.
This is the fundamental beauty of Net Metering which most people don't fully appreciate.
When you put solar panels on a rooftop and effectively make the utility bill 0 at the end of the year, you are getting the grid for free.
But in reality grid costs money. A lot of money. In fact where I live the grid is twice as expensive as the generation of electricity.
SCTY gets all 3dollars for a unit of electricity. SPWR makes 1dollar for that unit of electricity.
HenryF - you are using twisted logic to come to conclusions that support SCTY. You are extremely wrong in almost everything that you say.
You are wrong about using book value. JASO trades at 0.7x book value, so I guess that the stock should be 400% higher today to get to fair value using your logic.
You are wrong about the value you put to retail vs. wholesale.
You are wrong that SCTY's business model is more valuable than SPWR's.
And you are completely wrong on how you subtracted the $181m in equity raised from both 2013 and 2012 equity totals on balance sheet to show that SCTY still grew 122%. In fact, this example just shows that you are either not capable of doing 5th grade math or you are purposely misleading us. In either case, it makes all of your posts completely useless. edit: on this part, I just noticed that SCTY had to restated its financials for 2012, which led to a lower book value than previously reported and I was using the wrong financials on wsj once again, so please ignore this part of my post.
Having this discussion on valuation with you has been a complete waste of my time. I hope that you stop misleading people here, because everything that you say is wrong.
I really recommend ignoring what HenryF wrote about valuation. You can ignore everything what I said as well, but please do not use his twisted logic for valuation. Not only is it twisted, but it also has very simple math errors in it just to get to an answer that suits his agenda.
One last comment regarding the post futureproof made on SCTY being a safe haven investment in a recession: that is the absolute worst investment advice I have ever heard in my life (not kidding). If a recession is about to start then the first thing you want to do is dump SCTY (same goes for other solars, but especially SCTY).
Good luck to all SCTY investors here. I find it very odd that as soon as this thread was started, there have been new members that came to TMC only to discuss SCTY. At least a few of them sound like SCTY employees with the way they talk, using marketing speak language that SCTY uses to get customers.
To all my friends on TMC beware of these people who are extremely biased in their posts to a point where they will take the biggest negative for SCTY and twist it into a positive.
I am done wasting my time here. Buyer beware!
