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Canadian Solar (CSIQ)

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Guest spiritcraft

How to explain the DQ action then? They have run out of steam. With that tiny float, they should be up $3 today. I think this is just another day at the office... some rising, some not so much. That Chu dweeb from Maxim came out with some un-deep comments that may have taken some of the wind out of today's sails. Who knows... I think that there will be a balance to prices as China does not want to harm panel makers or make the PV more expensive to install. Nothing ever makes total sense in this sector.

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Guest larryvand

How to explain the DQ action then? They have run out of steam.

After a 300% run I would expect so.

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Guest MichaelZhao

which is quite unusual for chinese solar company these days. I hope this is a good sign of a year end report.

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Guest solarman1

$500 USD or $500 RMB? I guess this is a good sign if CSIQ has a strong year end. Just a little less than 3 weeks and we will find out. Where did you hear about this bonus payout by CSIQ?

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Guest larryvand

Now we know why CSIQ has been hanging around $5 for too long... Now at $4.14. Almost down 20% from 5.12

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Guest ILOVEPV

so why? I see no other reason than a short attack and this attack was planned in advance. Solars lost 20% for the last 2 days and what is interesting yesterday they lost on no news. Actually solars moved over 120-400% from historical low just on potential changing a situation to a better one. The market never let any stock or pack of stocks to rally with no pull backs. If an uptrend is sustainable a typical correction is up to 50% of a gain. Let's take a look under this angle on e.g. SOL. It trumped from 1.10 to 2.80. Gain is 1.70 i.e. we can expect a correction the very bottom in 2.80-0.85=1.95. CSIQ gained $3. i.e. the lowest correction price should be in a range of 3.50-3.80. Same for TSL. MMs are trying to reach a bottom ASAP to cause a max pain for traders and short term investors. It goes without saying prudent investors will use this correction as an opportunity to increase positions.

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Guest ILOVEPV

SOL was down today + yesteredy 17%, CSIQ - the same. We can not count %% and compare every hour. As we already know ALL solars (with rare exception) rally or fall like a pack that let you you a small chance to play (rebalance) between them. This is a part of a trading strategy used by big trading houses. BTW: short covering just started -exactly as I wrote an hour ago. It does not mean we will get back today but a certain temporary rebound is imminent.

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Guest larryvand

Sold it all at $4.40. I wasn't about to hold it overnight as we may get more of the same tomorrow.

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Guest ILOVEPV

good job, Larry. But remember, shorts did not finish their destroying job. Before solars resume a rally we will see many severe swings within next 0.5-1.5 months. I like this pattern for fast trading. At the same time I hold strong my core position adding to it from time to time up 50% of a trading gain.

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Nothing goes straight up or straight down... Solars have no corrected 20-30% from recent rally. To me as long as fundamentals continue improving, this was healthy for next leg up to occur. It was a great day tp add or start a position.

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Guest solarman1

Nano - Are you still in CSIQ? I got some CSIQ today at $4.21 and believer this pull back was necessary for the next leg up. Looking forward to CSIQ's CC next month.

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Guest nanofrogfish_spf

solarman...bought all the shares I needed during the doom & gloom days of Nov. 2011 and middle of 2012...don't really need anymore. Most of these shares will be in my possession until there is some factual news that CSIQ's business plan is falling off the tracks...so I expect to be holding for many years.

The day to day price swings don't mean much to me at this point...it's the long-term trajectory that I'm concerned with...and with the visible profitability for 2013 it's really just a waiting game for a more reasonable market valuation...

On another subject, the EU news of panel registration was nothing more than a procedural act, and has absolutely nothing to due with the final determination (other than maybe to acknowledge that the members support the legal process). But I see the doom & gloomer shorts are already at it, with the worst-case scenario's being thrown out there like it's a done deal...

I think that the sentiment in this investigation was summed up well be the German Minister of Environment about a month ago in this article ;

“The proceeding at the EU Commission has been controversial from the beginning. There are German companies too, which profit from the Chinese solar boom, especially the mechanical engineering companies. They fear it could harm the relations with Chinese companies. And some German suppliers and component manufacturers, like Wacker Chemie for example, oppose such a proceeding as well”, the minister said to Europressedienst.

Basically, he supports the legal process, but talked mostly about the acknowledgement of the harm it could do to many others...something not considered in the US process. Also, recent comments out of the EU indicate that they really want to come to some agreement...I expect an 11th hour agreement to come into play, and if not it will be a slap on the wrist for the Tier-1's, but probably much more severe for the rest...

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Guest nanofrogfish_spf

I’m going to stick my neck out here before earnings and give my EPS “guestimates” for CSIQ in 2013...I’m sure I’ll be revising these on March 12th as more data points become available..

2012 was a tough year for EPS predictions...not much real data to go on, and costs/ASP’s/demand were constantly changing. But assuming 2013 is a year of pricing stabilization and rebound, and demand approaches the 40GW mark, then the EPS picture (at least in CSIQ’s case), becomes a lot clearer. This year, over half the revenue and margins from projects are fairly visible, and there is more data available on the rest (such as export data). So now I can just let the “spreadsheet do the talking”, without so many blind assumptions needing to be made every quarter.

I’ve just recently updated my project spreadsheet. On the US projects, it was never (and still isn’t) very clear on how many they were developing vs. joint venture (and even what % on the joint venture). Based on the Stratus Solar news, which is a big junk of their US portfolio, I lowered both my 2013 and 2014 revenue estimates for the US projects by 50c/W in each year, just to be extra-conservative on the mixes and percentages. I also got a little more conservative on non-utility sale GM’s, and spent more time breaking out fixed vs variable (shipping) operating costs.

For reference, the following assumptions were used in my model;

1) Numbers do NOT include forex gain/loss or taxes.

2) Numbers do not include 1-time provisions (if any) for LDK settlement (should be taken in Q4).

3) CSIQ non-utility module shipments are 1.65GW.

4) Q1 numbers assume revenue from both finished TransCanada projects are realized in Q1 (one may have been realized last quarter, and would lower Q1 EPS number by about 30c/share).

5) quarter-by-quarter will vary with timing/percentage of revenue recognition...my model is based more on a “smooth curve” (a miss one quarter would be made up the next, and vise-versa).

5) EU outcome is not worst-case scenario, and huge trade war does not start...even with the worst case scenario that significantly impacts shipments volumes, 2H earnings for CSIQ would still be positive.

I have the following EPS numbers modeled for this year;

Q1 – $0.08 EPS

Q2 – $0.06 EPS

Q3 – $0.78 EPS

Q4 – $1.82 EPS

2013 Total $2.74

These are conservative estimates in my opinion, and all the numbers are positive. In my estimates, CSIQ never even turns an operating profit from the non-utility scale side of the business... losses range from 78c (Q1) to 45c (Q4)...this is what I call the “Power of the Projects”. So there is definitely plenty of upside to these numbers by year’s end, as I expect the module side of the business to actually be profitable in the 2H.

In my last CSIQ outlook posting, I had an estimate of $3.65...and I still think this is very doable. But for a change, I’d rather have the bar set low and surprise to the upside, instead of the other way around as we’ve endured for the last 2 years...there's also more room to absorb other unforeseen costs and curve-balls that may get thrown their way...

Btw, the $2.74 estimate, when taxes and such are considered, is probably not too far from the latest analyst EPS estimate increase to $1.77/share in 2013...I’m guessing he was being conservative too...

GLTA....

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Guest larryvand

It would be interesting to know if you made a similar forecast for 2012 in the beginning of 2012. BTW, I wish you'd be right cause then all of the solars will be posting massive profits then in 2013.

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Guest Lepv123

How much of that translate into price per share? If we use a P/E ratio of 10, then that will be close to $30 per share? Even with their P/E ratio of five, that would be close to $15 a share. Thanks for your work!

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Guest larryvand

PE of 10 will never happen. Here Apple is trading at a PE of 9 with zero debt and 1/3 of the market cap in cash. And it's not even Chinese. Mid to high single digits the best we can hope for IMO. So for $2 EPS you'd be looking at $10-15/sh for the good ones with a good balance sheet. JMO.

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Guest Lepv123

AAPL was trading at a high of $707 which put it at a PE of 16.xx and analyst were giving a target of $1000/share. This would translate into a PE of 22. My point is that a PE of 10 is still actually very conservative if the public believes that solar is the future. But even with a PE of 7, that would still translate into a range of $12-$15/share. Still a very good gain.

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Guest larryvand

And I'm saying that PE of 10 is NOT very conservative. You will need a stock bubble, tulipmania, to see a PE of 10 IMO. If you think Chinese solar are even 50% like Apple with no debt, a mountain of cash and with proprietary technology and thousands of patents in a market that has more demand than supply, then go ahead. Myself, I'm being more realistic, especially after the solar massive implosion of 2012 which BTW, did not even help in solving the massive overcapacity. 60GW capacity with 30GW of demand. And I'm sure some companies are waiting for an uptick and to turn profitable to start expanding capacity yet again even though we have 100% overcapacity that can be replaced with a technological breakthrough almost overnight. I would love a PE of 10 for solars, and Apple at $1000, but being realistic, is not going to happen for either one IMO. BTW, trading volume in the stock market declined for the 3rd year in a row. Which means that more and more people are waking up to the corrupt casino the stock market is, and they don't want anything to do with it.

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Guest littleguyintucson

It would be interesting to know if you made a similar forecast for 2012 in the beginning of 2012. BTW, I wish you'd be right cause then all of the solars will be posting massive profits then in 2013.

Nano is quite the bull http://finance.yahoo.com/mbview/userview/;_ylt=AieX4iLaCG8z9ORdeyrtxn4LH4hG;_ylu=X3oDMTB2anJoaXB2BHBvcwMxMARzZWMDTWVkaWFNc2dCb2FyZHNYSFJVbHQ-;_ylg=X3oDMTBhYWM1a2sxBGxhbmcDZW4tVVM-;_ylv=3?&u=nanofrogfish_spf&bn=0043182b-a7d8-3227-b17c-69636fa526f2&f=0&page=25 Feb 27 2012 CSIQ price $4.00 if he held he is up 10% Right now my money says that CSIQ is way undervalued. I also think that some of the smart (deep pocket) money is starting to figure this out. Trust me, the analysts will be the last ones to get it...they just don't spend the time or resources on these small cap, small float chinese ADR's. They group them all together and make general assumptions about the industry. There are a few though that are starting to figure it out...that not all solar co's are equal, and there is huge upside to this industry. Listening to todays presentation, and looking at the updated (yesterday) IR presentation on their website, just reinforces my belief in the future greatness of this company.

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Guest solarman1

Littleguy - I am leaning toward CSIQ as well because of their utility projects with high gross margin with estimated over $1B revenue coming in the back half of 2013 and into 2014. I am new to the solar world of investing, but when I read Nano's posting, I get excited about CSIQ's future. Sol also is on my radar screen I am considering initiate a position soon here. Littleguy, in your opinion, what would be a fair stock price for CSIQ right now when you said CSIQ is under valued??? This is getting very exciting in the solar space in the coming months.....

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Guest larryvand

Can we please get some predictions for CSIQ for Q4 2012?? Let's see who is right on the money. Earnings are scheduled for March 11th, 2013 at 8:00 am.

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Guest ILOVEPV

I think almost all of you got a wrong concept talking about PE in single digits or 10 as max using PE as criteria. The stock market never takes care of a CURRENT situation. The only important thing is future and not only future but rather a dynamics of reaching a future. Take a look at AMZN. This barely profitable stock is trading over $250. Why? Because analysts already calculated that within next 5 years the company will be increasing her earnings 40% each year. As a result all the possible FUTURE increase for the next 5 years is already baked into to a CURRENT share price. Same for NFLX and many others. On a "slope" side you've seen the smae approach with solar stocks. They started to slide being extremely profitable demonstrating increasing/stable high earnings. Why? Same reason. Smart analysts calculated future oversupply glut and loss of revenue. Resume. If the markets calculate a bright future for solar industry the CSIQ stock price will be much higher and much faster reaches the top than any CURRENT fundamentals suggest. That is why I won't be surprised if CSIQ reached $30-35 prior to earnings reaches even $1.50. Same for SOL and many others. As for AAPL: dynamics changed i.e. a speed of growth become lower (note we are not talking about business reversing or lower earning, we are just talking about JUST lower growth speed). There are many smart and knowledgable people on this board who made a remarkable job learning everything about PV. I impress reading these posts. But the market works using different rules and these rules I tried briefly demonstrate above.

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Guest nanofrogfish_spf

How much of that translate into price per share? If we use a P/E ratio of 10, then that will be close to $30 per share? Even with their P/E ratio of five, that would be close to $15 a share. Thanks for your work!

Anyone who's read my postings over at Yahoo for any length of time (or has spent considerable time going through my entire history looking for something to pick on), knows I'm a long-term investor (and I'm talking years, not months like in today's interpretation), and not a Short Term Earnings Obsessed (STEO) investor. This is how you can beat the manipulative market participants at their own game, and how the little guy can truly make big money. So I don't put short-term stock price ratings on anything...it's pointless to me. And I don't try and go back and forth with the STEO daytraders that dominate these boards. I just know right now that CSIQ's stock price should be a lot higher than it is based on their project pipeline, and that valuation metric will continue to increase for many years with the Next Wave.. btw, anyone can look up my posting history on CSIQ in 2012 on Yahoo. Look up STEO. And notice my postings were only bullish on CSIQ and mostly bearish on the rest of the sector. And look at which stock also happened to outperform the others...so I certainly had bet on the right horse. And I knew what is happening now would come at some point, but I never knew exactly when. And based on my strong DD, I knew decent profitability was coming for CSIQ (didn't see this visibility in any of the others btw). I had expected them to be breakeven by Q4-12, but ASP's continued dropping all year and the 2 TransCanada projects' revenue recognition got pushed to Q1...it just delayed the good report I was expecting in Q4 to Q1. I never pretended to be arrogant enough to be able to pick the perfect times to get in and out...so I decided to just get in during times of irrational fear (almost all my shares are in the $2.50 to $3.00 range), and then just wait it out until the industry's performance drowns out the negative attack campaigns. Buying when everyone else was saying "sell-sell-sell this is the end of solar" has worked out nicely so far, but this is just the beginning. My postings are all visible and have been very consistent since I started posting. And notice that my history is visible, since I have nothing to hide (I'm not hiding under a new ID)...unlike some of the stone throwers here. I've posted 100's of lengthy messages, I've never pretended to be right on everything, and quick to admit when I'm wrong. And I'm pretty sure if the tables were turned we all could find plenty of things to pick on....

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Guest spiritcraft

Right now, as of today SPWR has a Forward PE of 25. Without doing the math, their PE on TTM EPS is over 100. Just saying... All this at a time where the PV revolution, the coming inflection point and hints of future profits are not widely known. Public sentiment is not to a point that draws investors into the next big thing... the energy revolution. It really does not take much for PE's to inflate, especially in a small window of time. I don't think anyone is suggesting that PE's in the 50's are maintained but you could easily see that type of PE in a small window of time when there is a feeding frenzy. In many ways this is like starting all over again in terms of an investment. From 2009-2010 there were big profits but it was all about the subsidies of Germany and then Italy. There was no unsubsidized market. The common knowledge at that time among the general investment community was that PV would be viable in 10-50 years, public sentiment was worse. The PV world has been completely shaken up and we are nearing that inflection point where PV booms all over the globe. I personally have always thought that there would be this inflection point, followed by a brief period of time where there are changing attitudes en mass. This is happening years before I thought it would and there will be changed sentiment and a common knowledge that PV is real. Even if there is a mini frenzy to enter the sector we will see valuations spike at some point. Who knows when and by how much but this is a likely scenario for some companies in this sector as it is yet to really be discovered. The power of the Sun is the future and I think that the massive pricing declines that many of us suffered through has made the likelihood of some new tech destroying PV more unlikely. Also, if you listen to the early rumblings of "analysts" you hear words like "unstoppable", "unavoidable", "inflection point", "global revolution"... I never heard such talk before. Even if the Sun was not our future they have the power to bubble this up just like they took it all down. Greed will be on our side in the future and maybe for long enough to allow us early birds to make a nice profit. An example of what could happen PE wise: Say company XYZ solar announces later this year that they are going to make $2.50 next year and that they are selling panels all over the globe in unsubsidized markets.. that stock could fly to $30-40-50 with a high PE in an investor feeding frenzy. They could also just as likely make $4-5 in EPS 3-5 years from now and still be in the same price range with a lower PE as there was some kind of maturation happening. Again, this is really all brand new again IMO. No predictions on when but greed will definitely be on our side instead of against us at some point. We just have to pick the right companies that will be able to keep costs down enough to sell into the coming global demand revolution and make a profit.

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Guest nanofrogfish_spf

I personally have always thought that there would be this inflection point, followed by a brief period of time where there are changing attitudes en mass. This is happening years before I thought it would and there will be changed sentiment and a common knowledge that PV is real.

spirit...what a GREAT post! This is what it is all about. The result of all that gloom and doom and pain the last couple years, was actually very positive from a long-term perspective for the industry (unless you were one of the companies that didn't make it). It accelerated by many years the process to get to this point...as noted most thought it would take at least 10-years or much longer! Good thing too...because the planet needs clean energy NOW! The industry is mean an lean now, just in time for the "Next Wave"...

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