First Solar (NASDAQ:FSLR)

[jw7]

OK stock gurus, can somebody find me something wrong with this stock? This came up in P&R and I am thinking about it.

Great cash, debt/equity, current ratio, margin % and 300% sales growth over 2007 numbers with only a 16-17 P/E.

I need to research more and understand the analysts opinions which are all over the place.

Normally I don't like investing in individuals, but this one piqued my interest.

Shoot me down, folks!

 

[jefftheshark]

According to my limited chart abilities, the stock appears to be overbought and near short term resistance @122. From a technical standpoint, I'd look for a little pullback to the 20DMA (around 114 +/-) to start accumulating a position.

The charts also show a Bullish Pennant formed about 2 weeks ago that would predict an expected price of between 129 & 151 to be hit this summer, but the sideways movements this last week have taken the steam out of that pattern for now.

As far as fundamentals go, this market has pretty much thrown those out the window. I'm just looking at technicals at this point, but that's just me.

Is this what you were looking for?

JTS

 

[CaptTurbo]

Do you believe solar products will continue to grow 300%?

 

[Gaddabout]

People are rightfully concerned about solar as an industry. The current market is driven by massive gov't incentives. When those end, the massive growth will end. Solar was a hot growth market in the 70s, too, for the same reasons. It crashed and burned then. There's no reason to think solar can sustain growth on its own right now, either. For all the good it does the environment, it's still cost-prohibitive for most people. Until they can bring down the cost (and sudden demand clearly hasn't helped here), it will always be an up-and-down industry that fluctuates when oil spikes, freaks people out, and gov'ts give handouts for alt-energy adopters.

 

[Gaddabout]

But let me add First Solar is a top notch company that is well positioned to last through many ups and downs. Their corporate headquarters have a beautiful Tempe building right off the 202. Wish they would move those manufacturing jobs here (I think they could substantially lower their costs by doing so), but they will be around while the little guys get thumped by any small crisis.

 

[jefftheshark]

Do you believe solar products will continue to grow 300%?

I'm not sure it makes any difference.

IMO, solar stocks are basically correlated to energy prices, which is why I don't think the fundamentals are that important for the most part.

The solar stock that I've been trading in, STP, for example, ticks up and down depending upon the price of a barrel of oil and follows the same path of FSLR, and yet trades at one tenth the price.

In today's market where buy and hold makes very little sense, I'm of the opinion that solar product sales have zero correlation with their stock prices anyway. But that's just my opinion.

JTS

 

[CaptTurbo]

Id be tempted when the P/E gets closer to 8-9 which would be 70 bucks or so.

 

[CaptTurbo]

I'm not sure it makes any difference.

IMO, solar stocks are basically correlated to energy prices, which is why I don't think the fundamentals are that important for the most part.

The solar stock that I've been trading in, STP, for example, ticks up and down depending upon the price of a barrel of oil and follows the same path of FSLR, and yet trades at one tenth the price.

In today's market where buy and hold makes very little sense, I'm of the opinion that solar product sales have zero correlation with their stock prices anyway. But that's just my opinion.

JTS

Well if you believe this than buy away. I, myself, disagree with everything in this post.

 

[CaptTurbo]

Im buying some 20 puts on BP for Oct.

 

[jefftheshark]

Well if you believe this than buy away. I, myself, disagree with everything in this post.

And that's why they play the game.

JTS

 

[conraddobler]

Behind everything on any individual stock there is a massive inflation / deflation theme below the surface that oscilates.

Things like this look like the next MS or GOOG or whatever, but then we know for every one of those there are a lot of dead tech fish that stink up a lot of peoples can't miss next great thing strike it rich long term hold til death portfolios.

Any alternative fuel starts out with OPEC as it's most powerful enemy, also the economy could be in for a long decline here.

There are times to buy stuff, like F which is one of my few great home runs of my investing career.

I've had a lot more misses than that on long term stuff but the best buys I've ever made on a long term basis took years to come to fruition.

You're doing it right IMO when a company catches your attention, you pay attention to it's struggles and success over years and then pounce on it when you know in your gut it's a great price.

That to me is long term investing.

JMO not investment advice.

 

[Russ Smith]

my sister owned this one for awhile. She says 2 big issues, one most of their sales are in Europe, I believe to Germany and France so concerns over the Euro economy are hurting FSLR. The other one as Matt said is when gas is about 90 a barrel or above, subsidies start kicking in with the solar market and countries start buying, when gas is below that, subsidies go away and the solar market dries up.

Both are apparently working against FSLR right now.

 

[Gaddabout]

my sister owned this one for awhile. She says 2 big issues, one most of their sales are in Europe, I believe to Germany and France so concerns over the Euro economy are hurting FSLR. The other one as Matt said is when gas is about 90 a barrel or above, subsidies start kicking in with the solar market and countries start buying, when gas is below that, subsidies go away and the solar market dries up.

Both are apparently working against FSLR right now.

Do you agree that if this is a game of waiting out the competition, FSLR stands to be a winner in the long term? I guess it depends if you think their connection to the ASU Solar Initiative will pay off with cheaper/better/more efficient photovolataics. If I understand correctly, they share some first rights with SRP.

 

[Russ Smith]

Do you agree that if this is a game of waiting out the competition, FSLR stands to be a winner in the long term? I guess it depends if you think their connection to the ASU Solar Initiative will pay off with cheaper/better/more efficient photovolataics. If I understand correctly, they share some first rights with SRP.

I don't know anything about them. I just knew my sister had owned the stock at one time so I asked her why they were struggling.

As I said in the politics board there are WAY too many solar companies, a large number of them will ultimately fail because they can't all "win." Who those winners will be is anybody's guess.

 

[jw7]

Good discussion everyone. I asked to get shot down and y'all did it.

Someone else be brave and post a ticker.

 

[conraddobler]

I have researched this a couple times before, but never pondered this before.

Looks like to me once they double from here they're stuck.

http://www.wikinvest.com/stock/First_Solar_(FSLR)

The company's modules have cost advantages over silicon PV cells, however production is heavily dependent on tellurium (Te) supply. It is the major component in First Solar's panels (which are made of Cadmium Telluride), and is one of the nine rarest elements on Earth. Statistically it has been reported that 160 to 215 metric tons of Te are mined each year, which means that First Solar requires 51% to 81% of the world supply of Te. If something happens to this supply or First Solar expands too quickly, there is no guarantee that global supply will hold up.[4]

That means at their current growth rate they'll suck up all the supply of Te in about 2 years.

That's gonna hurt IMO.

 

[LVG]

Tellurium is recovered from the residue produced in refining blister copper from deposits containing recoverable amounts of tellurium. There are large quantities of tellurium in some gold and lead deposits, but the tellurium is not being recovered from these at this time. In addition, tellurium is present in coal and some lower-grade copper deposits, but the cost of recovering the tellurium from these deposits is too high to make it worth the effort. These deposits are called subeconomic deposits.

Nations producing tellurium and tellurium dioxide are the United States, Canada, Japan, Peru, and a number of other countries. As with most commodities, companies in the United States import tellurium. Of the tellurium imported each year, most comes from the United Kingdom, followed by Philippines, Belgium, Canada, and a number of other nations.


http://www.mii.org/Minerals/phototellurium.html

It sounds like (without knowing the recovery and refining process) that existing silver and gold mines could become sources of Te.

 

[conraddobler]

It sounds like (without knowing the recovery and refining process) that existing silver and gold mines could become sources of Te.

True enough but it seems to me IMO their entire advantage is one of cost, because theirs are not as efficient, just less expensive.

So if the Te has to be mined in ways it was not before economical to do so it would imply it's cost would be rising a lot.

This could IMO remove their advanatage on cost or at least cut into it.

 

[jw7]

JTS was somewhat right on his short-term charting, but overall, you all suck at stock advice.

 

[jw7]

Mea Culpa

Thanks for talking me out of this one, folks.

Down to 45 from 170. Wow, did I miss the read on that one. Cardinals should hire me as a scout with my Nostradamus abilities.