Tweeted 3 solar names back in Mid December 2013 as being cheap and worth taking a posiiton if you believe the Solar Industry will grow over the next 5 years.
It is crazy that Solar stocks and Oil prices are so highly correlated – Solar produces electricity???
Icahn says on his twitter he makes make money from the markets ‘natural stupidity’ – like when $YHOO was trading at $33 when it was worth $50 – is this another example of natural stupidity where an Industry which has very little to do with oil trades with oil? are Electricity prices going to become cheaper because of lower oil prices?
All 3 stocks have done well since mid december and yesterday’s announced that $SPWR and $FSLR are to create a YieldCo.
A yieldCo is like a utility stock – it should have a reliable cashflow stream the earnings of which are distributed to shareholders – the Apple Solar Farm announced recently could go into in the YieldCo. The YieldCo would be spun off as a separate company some time this year.
$SPWR FV=30 and $FSLR =48 Before this announcement – not sure exactly what the yieldCo SpinOff would be worth – but assume 10% so FV=$33 and $53 respectively.
If you got in at $24 on $SPWR trade, then consider taking some profit around here – there is still risk the yieldCo Formation may fall apart. Keep a core position.
2CentView has a trading and core position in $SPWR opened at $24 mid December 2014, and looking to take some profit around here. Will keep a core position.
The rapid fall in oil has seen an amazing collapse in Solar stocks – 2 particularly – $SPWR (SunPower) and $CSIQ (Canadian Solar).
Both these stocks were trading around $40 in September – they are now $23!
2CentView is that the solar industry will not slow down in growth due to lower oil prices – there is still a need to reduce electricity bills and for cleaner energy to stop global warming killing wild life and polar bears in the Artic.
Was stopped out in $FSLR earlier in the year – but the current levels are very attractive if you believe the Solar industry – which is also making technological progress in making fuel cells produce more energy from the sun with the same or lower costs – will continue to move forward regardless of what happens to oil prices.
$SPWR = 30
$CSIQ = 45
$FSLR = 48
2CentView pick is $SPWR as they sell to retail as well as Industry, and judging by the growth of Solar City there is a growing market.
The Stocks are STILL VERY Risky though with oil prices falling – so manage risk and set 25% downside stops – look to take profit at 50% up.
The World needs Solar power – probably only a fraction for the energy from Phoebus he that wandering knight so fair, is used…And I am seeing in the UK all new houses built with Solar Panels… 2CentView mentioned on 6th December that $FSLR was the pick – it did trade down but did not hit the stop so hopefully if you are still in it…
The Company guided that 2015 EPS will be between 4.5 and 6. It currently trades on a 13% implied growth rate out from 2014 earnings, whereas other Solar companies trade on 20x or higher. It reached $300 in 2007!
So, FV = $105 (20 multiple of mid market EPS guidance) – so 45% upside vs $72. Stop $52.
Check out the chart and the company. 2CentView is bullish on Solar power and has a core position in $FSLR.
All the new houses i see being built are using Solar Panels. 2Centview is that there is a chance this industry could make a come back over the next few years.
if you look at the chart for $FSLR – stock reached a peak of $300 in 2008. At $60 it is only on 8% 5Y implied growth rate, so much cheaper than $SPWR which is on a 20% 5Y Growth rate. $SCTY – solar city is not forecast to make positive EPS for another few years so cannot tell what this is worth – but keep any eye on it as it as another Elon Musk company!
Buy $FSLR at $60 if you want exposure to this Industry. TP $90. Cut $45.