SOLF

[kslifka]

SOLF popping today.  Could be in response to other solar stocks like ASTI and CSIQ.

[bjc]

I never like to do this, buy after hours or buy a stock after it goes up 16% in a day, but I just bought some SOLF after hours. 

A solar company with awesome fundamentals...we've seen what that can do.  Look at STP and the run it has seen, SOLF's fundamentals are even better.

Many applauds for this one ksl, I think we have an opportunity to make some money here.  It will probably be rocky, but there is great value here which you can't find anywhere in a solar stock!

[bjc]

Apparently a great comparable for SOLF would be YGE, as they both produce photovoltaic (PV) cells and PV modules in China.  They have similar production levels, yet YGE trades at a market cap of ~7x that of YGE.  I think you have found quite an undiscovered gem here ksl that the market has mispriced terribly.

We have clearance to double tomorrow.  We could be at $50 and not overvalued...



Good post on yahoo's message board by what sounds like a knowledgeable poster. 

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=tm&bn=51329&tid=7432&mid=7434&tof=15&rt=1&frt=2&off=1

"
A key comparison b/t SOLF & YGE: (Not rated) 5-Oct-07 11:19 pm YGE is increasing both its actual production and its production capacity, but is ramping its capacity even faster. Earlier in 2007 YGE had 100MW of production capacity. They previously guided, and have now re-confirmed, that they will have 200MW of production capacity by the end of 2007 (this year), and 400MW production capacity by late 2008.

SOLF is also growing both its actual production and production capacity. SOLF also previously guided, and has now re-confirmed, that they will have production capacity of 240MW by the end of 2007 (this year), and 360MW by the end of 2008.

Though YGE has more actual production right now, roughly 3 months prior to the end of 2007, SOLF appears to be expecting a faster rate of increase in its revenues for the second half of 2007.

It also appears that SOLF has been ramping up its production capacity even faster than YGE has, will actually exceed that of YGE by the end of 2007 (this year), and expects to have almost as much capacity as YGE by the end of 2008.

So what does this mean?

Well, certainly other factors come into play, but on its face, though YGE might be worth more than SOLF right now given its higher actual current production, thus the much higher current share price ($31 versus $13), SOLF does appear to have more growth potential over the next year, and more actual capacity thus room to grow right now.

Even if you conclude that SOLF only grows at a comparable rate to YGE, rather than a faster one, thus continues to lag in actual revenue numbers, given their fairly similar production capacity projections for late 2008, the, or at least a, key difference will be the number of outstanding shares used in the earnings per share calculation for each company.

YGE has 126.9 million outstanding shares.
SOLF has just 48 million outstanding shares.

If SOLF manages to ramp up actual production to anywhere close to capacity over the next year, those added revenues should generate a much higher appreciation rate in its EPS number. This would seem highly relevant for potential share price appreciation from SOLF's current roughly $13 per share, especially when you consider that YGE is already at $31 per share and rising, and SOLF only has 18 million shares in its float versus YGE's 69.8 million share float.

I personally believe that YGE has much higher to go in its share price appreciation, this year and next, but based on the above comparison of where they are both headed, I also believe that SOLF is substantially undervalued right now.

Now, I'll spare you my calculations, but I have estimated that assuming a healthy market, and an ability to ramp actual production right along with production capacity, YGE could readily reach $50 to $60 per share by mid 2008, maybe sooner.

I see no reason why SOLF couldn't readily reach at least $30 to $40 by mid 2008. I could actually see SOLF passing YGE in share price by the end of 2008, but I won't make that leap right now. Both need to continue doing what they are doing, and fulfill their respective plans.

Strong buy to SOLF right now!


Sentiment : Strong Buy "

[bjc]

Rough estimates on SOLF revenue #s    These #s are from Aug 20 AP PRs for ER and Guidance.

With 16.4 megawatts  $60.8 million

60 megawatts   so we're talking $240 million with 60 megawatts in 08   

So That gives you 08 revenues in the $1 billion range.

Trading under $1 billion today.  Should get a forward price/sales ratio of at least 3..which gives me a target of $3 billion market cap.

Some of these #s are aggressive and some conservative.  For instance they don't reach capacity of 240 MW until end of 08, but Wall Street will give a high growth company like this the benefit of the doubt.   And a 3/1 price/sales would be too low for such a high growth co so this kinda evens out. 

I feel as if it is pretty underpriced, although the #s I was using earlier given from E*Trade were completely wrong.  But this is still very attractive relative to some of the other companies in this business



I'm pretty nervous, I've tried to stay away from such quick movers lately and stick to big caps, but I just couldn't resist what I found when I dug a little deeper here.  The technical situation looks great and there are some big time fundamentals to back it up.  I kinda have a feeling I'm not the only person who discovered this stock tonight. 

[bjc]

Well, I guess this is why I don't buy after a stock goes up 16% and additionally afterhours.

Oh well, I'm down about 7% but the chart still looks fine.

I'm in until the market capitalization more accurately reflects future revenues or the company tells me they're not doing as they say.

[kslifka]

Well, I guess this is why I don't buy after a stock goes up 16% and additionally afterhours.

Oh well, I'm down about 7% but the chart still looks fine.

I'm in until the market capitalization more accurately reflects future revenues or the company tells me they're not doing as they say.

If SOLF can close between $14.40 and $14.50 today.  I don't see why it wouldn't break higher tomorrow.

bjc...what do you think of CSIQ.  Another China solar stock that has had some contracts over the past couple of months.

[bjc]

CSIQ looks good to me.  After looking into a lot of them, I'm bullish on many solar stocks.

If these companies start making the money analysts expect them to, they should be trading at much higher multiples.  I'd expect a higher valuation that 1x forward sales.

Yes SOLF is forming an intraday wedge and testing the lower trend line right now.  It looks like it's breaking down out of it.

[kslifka]

Yep...today not the day for solar.  Oh well.

I agree in the short term these solar stocks will be trading at much higher multiples.  I usually go to coffee shops/restraunts to work...and I hear alot of business and government organizations talking about their solar plans.

[bjc]

It hurts to buy a stock the day before it falls nearly 10%.  It hurts especially when the stock you sold to buy it is ALVR which was up 4 and a half %.  Oh well.  I've done quite well lately and can't let this bother me.

Additionally, I still find much more upside in SOLF.  Especially if we get another day of China / Solar hype.  And SOLF is ramping up their capacity to produce PV cells, so the fundamental situation is awesome.  I'm pretty sure they're sold out almost throughout 08.  I can't remember all the information I read last night, and I can't remember where I found it all of course now either. 

This reminds me of SDTH a couple months ago.  I know the fundamental situation was awesome, but I got impatient and sold.  Its probably a double from where I sold.  I refuse to made the same mistake here.  The fundamental situation easily supports the share price where it is now.  It'd be nice to see a day of stability here tomorrow.  I don't have the stomach for these stocks.

[bjc]

SOLF might want to make a run through 14.  It's been indecisive on low volume.

[kslifka]

SOLF seems so undervalued compared to its peers.  They are expecting revenues for all of 2007 of around $275 million and it's only a $670 million market cap solar company.

Compare that to JASO which has had a huge run-up and reports earnings tomorrow is expecting revenues for 2007 of $300 million..  JASO is a a $3.5 BILLION market cap.


It will be interesting to see how JASO's earnings affect the market tomorrow.

[bjc]

Yes, ksl, I'm still holding SOLF and very confident in my investment.  If SOLF can produce earnings in the area of estimates, we should see the $20s quickly.  The research I've done leads me to believe SOLF deserves approximately half the market capitalization of STP.  STP's market cap is 10 Billion while SOLF's is 0.645 Billion.  SOLF has approximately half the production capacity as STP.  This is derived from this link:   

http://www.chinavestor.com/blog/PermaLink,guid,c555120e-8e92-4425-a07e-7fa0efb58211.aspx

Your other pick, CSIQ, also appears to be very undervalued.

The thing about SOLF is people question the integrity of LDK.  SOLF's contract for silicon is through LDK through 2010.  While I feel SOLF is my riskiest position, it therefore provides the biggest opportunity for a big reward.  I don't think it is out of the question for SOLF to trade at a market cap of 3-4 billion, which puts us at a share price of $60+. 

Maybe the market knows something we don't?     This simply seems too good to be true.  I don't get it.  $15 is big time resistance, there will be a lot of shorts who have to cover if we cross that threshold. 


ksl, by the way, ALVR is starting to look very attractive for entry.  Unless WiMAX is a bust, which I don't think is the case by a long shot, ALVR is getting pretty cheap. 

[kslifka]

Yes, ksl, I'm still holding SOLF and very confident in my investment.  If SOLF can produce earnings in the area of estimates, we should see the $20s quickly.  The research I've done leads me to believe SOLF deserves approximately half the market capitalization of STP.  STP's market cap is 10 Billion while SOLF's is 0.645 Billion.  SOLF has approximately half the production capacity as STP.  This is derived from this link:   

http://www.chinavestor.com/blog/PermaLink,guid,c555120e-8e92-4425-a07e-7fa0efb58211.aspx

Your other pick, CSIQ, also appears to be very undervalued.

The thing about SOLF is people question the integrity of LDK.  SOLF's contract for silicon is through LDK through 2010.  While I feel SOLF is my riskiest position, it therefore provides the biggest opportunity for a big reward.  I don't think it is out of the question for SOLF to trade at a market cap of 3-4 billion, which puts us at a share price of $60+. 

Maybe the market knows something we don't?     This simply seems too good to be true.  I don't get it.  $15 is big time resistance, there will be a lot of shorts who have to cover if we cross that threshold. 


ksl, by the way, ALVR is starting to look very attractive for entry.  Unless WiMAX is a bust, which I don't think is the case by a long shot, ALVR is getting pretty cheap. 

Thanks bjc for your comments. 

SOLF seems so undervalued compared to JASO with roughly the same revenues.  Maybe the market knows something we don't , but I like to think this is just an example of market inefficiencies.   Once it does go above $15 it will rocket higher quickly...I believe.

ALVR did touch the 200dma Thursday...but I am in no hurry to jump in.  Alot of technicals got broken in the past couple of weeks.  It will take some time to sort out.

[bjc]

SOLF appears to be in a decent buy range.  Just dipped under 13 and re-established 13.

I wouldn't be surprised at all by a further shakeup, this market effen sucks, but I believe SOLF is a great place for money over the next 6 months or so if it can follow through at all on production / capacity/ revenue projections.  This value is ridiculous.

My buy price is 15.12  but it's fine.  It would've been nice to get my shares 10-15% cheaper, but what are you going to do?  I was blown away by the fundamentals and HAD to have it THEN.  It's a good thing I couldn't sell my FLS shares AH to buy this (due to its illiquidity ah, I would've had to lose a couple bucks per share).  I instead ditched ALVR which turns out to be very lucky with its subsequent DUMP.  Anyway ksl have you dabbled in either SOLF or CSIQ yet?

[kslifka]

I bought SOLF a couple weeks ago at 13.65.  don't own CSIQ...it appears Solar may cool off for a little; just became too overheated.  But like you said the fundamentals will drive these stocks higher in the coming months.