$128.12
6.41 (+5.27%)
First Solar, Inc. (FSLR)
CAPS Rating:
The Company designs and manufactures solar modules using a proprietary thin film semiconductor technology.
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Poly-Si prices are going down the drain, eroding First Solar's cost advantage in thin film. Oil prices are down too, and I have real reservations about how much of a boost Mr. Obama's stimulus plan will give to U.S. sales. Meanwhile, the Italian and German solar markets look weak, and the Spanish market has all but vanished. Prospects look dim for First Solar.
Don't forget that the $1 trillion dollar cash infusion from the Fed and a few less dramatic factors will help the U.S. economy in a number of ways market.--------Creditloan-lines for solar projects may pick up nicely with all of that nice, crisp, shiny new cash floating around. Extra cash eases the intrest rates and boosts confidence-- expect a higher volume of new solar projects financed by credit. And even those independently funded should see some increase. ------------Inflation=Bad? Good for FSLR's Currency Hedges:----------If the extra cash causes inflation this may help First-Solar's currency hedges in the Euro market and pick up some of the slack, though I'm not sure about this. ---------------High Oil -----------Oil prices are rising at least temporarily. I'm not an expert in this so I don't know how long it will last. From an energy standpoint, oil and solar are unrelated. One is used for cars the other is used for stationary facilities and mass power generation, but thanks to investor ignorance the rising price of oil always has a postitive impact on Solar Stocks.----------OptiSolar's US Project-Pipeline:Need I say more?--------Better Credit SolarCity= Even more U.S. Volume.--------You raise some good points. Europe is being hit hard, and big time subsidies from the german government are sadly starting to.. well... subside. But like the tide of the ocean the harder the pullback the better comeback. Don't be too pessimistic about FSLR being unable to move it's 1GW capacity. The easing credit crunch and it's deals with Optisolar and SolarCity will pick up the slack. As far as their postition in the European field: their decision to finance some of their projects was a very smart move. There are some worries that this will deflate the EPS if this strategy picks up, as it was the cause for the problem in the last earnings release, but this shouldn't be much of a problem. Their currency hedges hedges against a rising euro should dispel any worries we have in the way of EPS. Another factor to improve the stock price is the rising price of oil futures on an anticipated bounce.---- -----The game isn't over yet. I would argue that they are the most well-postitioned solar company out there. Don't expect FSLR's heavy-hitting management team to accept defeat anytime soon. ------
Longer term I agree, but for the next two-three months the sun beating down on our heads will remind us to invest in solar. Not to mention the push to build out solar infrastructure and jobs from Obama team. The rest of the market will be selling away in May and solar plays will take attention away from the financials and general tech. Same thing happened last year..... Longer term China will likely make all of our solar components anyways so longer term the better investment would be JASO or YGE.
This appears to me to be headed toward value territory. I believe it's Gainesville Florida that is subsidizing solar and interfacing with the grid, a la California. These are popular programs...more ahead. If share price really does follow earnings...
SNRY is a better play right now.
Buy FLSR at $115.
I have real concerns about FSLR's use of Tellurium. There are many articles on the web (mostly in Seeking Alpha), all about how there is a limited amount of Tellurium around globally, and FSLR is consuming a lot of it already. They have refused to state what they are doing about this issue. If they need to consume more in the future - ie to grow their business, it will be capped by the availability and what would then result in the rapidly rising price of Tellurium.
Sample:
http://seekingalpha.com/article/54614-first-solar-vulnerable-to-a-tellurium-shortage
And many more:
http://www.google.com/search?hl=en&source=hp&q=tellurium+fslr&aq=f&oq=&aqi=
I don't like to be a conspiracy theorist, so if someone would like to disprove this, I'd be very interested to read the proof. Right now, the case seems pretty overwhelming against them.
The shortage info is old and bogus, written by someone shorting FSLR...Read the following, specifically "Company's risks"
http://www.azcentral.com/arizonarepublic/business/articles/1124biz-firstsolar1125.html