ASTI

[David Randolph]

How about Chinese manufacturer Trina Solar TSL looks very interesting. Analysts polled by first call expect Trina's profit to jump 73% this year to $1.66 and next year growth accelerating to 116% to $3.59.

It's interesting, I read where Germany is the fastest growing solar market in the world. About 87% of Trina's revs come from Germany.

Indeed, very interesting BigSully1, a $870 M market cap company with estimated 2008 revenues of $576 M and double digit net profit margin. Perhaps it is the right play for the solar energy market growth. I'll make a more in depth study on it over the next couple of days.

As for ASTI, I guess there's dilution going on now, due to this:

«Class A public warrants. The Class A public warrants included in the units became exercisable on August 10, 2006. The exercise price of Class A public warrant is $6.60. The Class A public warrants expire on July 10, 2011, the fifth anniversary of the closing of the IPO.

The Company has the right to redeem the Class A public warrants at a redemption price of $0.25 per warrant beginning January 6, 2007. The redemption right arises if the last reported sale price of the Company's common stock equals or exceeds $9.35 for five consecutive trading days ending prior to the date of the notice of redemption. The Company is required to provide 30 days prior written notice to the Class A public warrant holders of the Company's intention to redeem the warrants. As of September 30, 2006, 3,290,894 Class A public warrants were outstanding.»

The holders of these warrants are probably exercising them and then selling shares in the open market, hence the late day pullback yesterday. These are 3,290,894 new shares and that will put the share count at 10,247,415 and the corresponding market cap at $79.93 M.

There are more warrants:

«Class B public warrants   The Class B warrants included in the units became exercisable on August 10, 2006. The exercise price of a Class B public warrant is $11.00. The Class B public warrants expire on July 10, 2011, the fifth anniversary of the closing of the IPO. The Company does not have the right to redeem the Class B public warrants. As of September 30, 2006, 6,581,788 Class B public warrants were outstanding.»

So, if the stock goes to, say, $15, the market cap would then be (6,581,788+10,247,415)*$15 = $252.44 M.

Considering this we can pretty much put aside the expectation of a double over the short term, say, next two years.

As for risk ... well, the risk is people get tired of buying these newly issued shares and start selling all the way down.

Since the potential is greatly diminished by this convertible warrants issue I'm worried about the risk. I feel eggman11 was right and this trade is a mistake.

I don't quite recall the username, but someone asked me if I was in a position to make one of those video analysis for ASTI, and I said "no, this is a different kind of pick". Probably I shouldn't go after "different kinds of picks".

The chart remains bullish, as the stock still closed above the midpoint of the big white marubozu on March 14, which stands at $7.54, so, there can be another bull run towards $9 or so. But the stock can also dip below the $7.54 key level and start a free fall.

I need you to understand that no man always makes the right choices in the market or is able to act on perfect information. I didn't know about these warrants when I bought and recommended the stock. I take small losses when I make mistakes and large profits when I'm right, and that's the way I outperform the market over the long term. I'm making an effort to reduce mistakes by making a more in depth technical & fundamental analysis, hopefully covering all relevant aspects of a stock (although I know it is is impossible to know them all), before buying it. I didn't make this in depth analysis on ASTI and will pay the price.

The trading plan for ASTI is SELL.

[mbaugh]

The Company has the right to redeem the Class A public warrants at a redemption price of $0.25 per warrant beginning January 6, 2007. The redemption right arises if the last reported sale price of the Company's common stock equals or exceeds $9.35 for five consecutive trading days ending prior to the date of the notice of redemption. The Company is required to provide 30 days prior written notice to the Class A public warrant holders of the Company's intention to redeem the warrants. As of September 30, 2006, 3,290,894 Class A public warrants were outstanding.»

The holders of these warrants are probably exercising them and then selling shares in the open market, hence the late day pullback yesterday. These are 3,290,894 new shares and that will put the share count at 10,247,415 and the corresponding market cap at $79.93 M.

There are more warrants:

«Class B public warrants   The Class B warrants included in the units became exercisable on August 10, 2006. The exercise price of a Class B public warrant is $11.00. The Class B public warrants expire on July 10, 2011, the fifth anniversary of the closing of the IPO. The Company does not have the right to redeem the Class B public warrants. As of September 30, 2006, 6,581,788 Class B public warrants were outstanding.»

So, if the stock goes to, say, $15, the market cap would then be (6,581,788+10,247,415)*$15 = $252.44 M.

Considering this we can pretty much put aside the expectation of a double over the short term, say, next two years.

As for risk ... well, the risk is people get tired of buying these newly issued shares and start selling all the way down.

Since the potential is greatly diminished by this convertible warrants issue I'm worried about the risk. I feel eggman11 was right and this trade is a mistake.

David, after reading the info above, correct me if I'm wrong, but it says that the class A warrants cannot be exercised unless the stock price closes at $9.35 for 5 trading days.  I take this that no new shares have been issued yet since the stock price has never closed at that price.  As for the class b warrants the same thing applies except the stock price needs to close at $11.00 per share.  So how can the late day selling be these new warrants entering the market?  I still believe that this is a good short term hold until the price hits $9 or 10 then sell.

[David Randolph]

David, after reading the info above, correct me if I'm wrong, but it says that the class A warrants cannot be exercised unless the stock price closes at $9.35 for 5 trading days.

The warrants can be exercised. It is the right to redeem (by the company) those warrants that needs the close above $9.35 for 5 consecutive sessions. If the stock were to close above $9.35 for 5 consecutive days, the company could buy back the warrants for $0.25 each, so no holder of the warrants wants that, so probably almost all of them have been exercised and stocks sold over the last few days.

I still believe that this is a good short term hold until the price hits $9 or 10 then sell.

It's possible, but there's also risk of a drop towards $5 - $6. Good luck

[pompano]

ASTI moving to the upside, I believe it would be wise to be in this low floater, as it could explode to the upside at any moment.

[REALDEALS21]

APPROACHING NEW  52 WEEK HIGH !!

[soxguy]

This one's flying today. Who would have thought.

[ygtrdr]

Decided to hold my position from 7.80. Nice technical breakout on strong volume today!

[Se7en]

Guess I sold too soon, bought tuesday at 8.01$ and sold today at 8.80$ as it looked it was struggling to pass 8.80$, still happy with this quick gain though!

[jorgegr]

I'm still in ASTI. What a rally today
Regret got out of SILC when the market was showing weakness, but got a
nice profit anyway

[ravenquork]

I am holding also. I think Davids method of analysis ignores just how strong and long a popular stock in a very popular segment can front run fundamentals.

[jorgegr]

Sold all my shares at 9.59 and 9.55.

[ygtrdr]

Sold ASTI @ 9.50

[runner2847]

Man....ASTI, ASTIZ and ASTIW are all running like crazy. How high can these guys go?

[pompano]

Congrats to those who did not get shaken by Tuesdays slight technical weakness.    Looks like this one wants to run much more

[David Randolph]

I'm glad you were able to make some money in ASTI, even though I lost a bit. I just think it will be almost impossible for it to approach $11, as more than 6 million convertible warrants would convert at that price, by itself doubling the market cap. I believe your sale around $9.5 was just great, congrats