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First Solar (FSLR)

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2 hours ago, disdaniel said:

My OpenInvest portfolio (~$5,500 in S&P 500 type firms--but minus all fossil fuel, large mining, tobacco, chemical, utility and big banks) just purchased 1 share of FSLR on Friday.  Normally solar stocks plummet 25-75% after I first purchase .  Fair warning!

Wow. Don't knock yourself out.

Here is the take from Credit Suisse on Friday's action:

 Our take  Renewables: Solar manufacturers were down 5-10% on Friday morning possibly due to quad witching, market sell off, and concerns that the US would impose additional 25% duty on an expanded list of Chinese imports (which might include solar products). We believe the reaction is overblown as the oversupplied solar sector has enough non-China capacity to supply to the US market if required. We have not yet seen signs of consolidation upstream, but downstream micro-inverters have taken the first step. Declining cost of solar and storage continues to exceed expectations, while cities and states ramp renewable demand.

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23 minutes ago, sunnypease said:

Wow. Don't knock yourself out.

Here is the take from Credit Suisse on Friday's action:

 Our take  Renewables: Solar manufacturers were down 5-10% on Friday morning possibly due to quad witching, market sell off, and concerns that the US would impose additional 25% duty on an expanded list of Chinese imports (which might include solar products). We believe the reaction is overblown as the oversupplied solar sector has enough non-China capacity to supply to the US market if required. We have not yet seen signs of consolidation upstream, but downstream micro-inverters have taken the first step. Declining cost of solar and storage continues to exceed expectations, while cities and states ramp renewable demand.

Ha! It has nothing to do with all the downgrades, including the Credit Suisse one which was already bearish to begin with. Or the reason for the panic what with the whole sky is falling along with ASPs thing. Nah, quad witching maybe. 

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22 hours ago, Mark said:

Ha! It has nothing to do with all the downgrades, including the Credit Suisse one which was already bearish to begin with. Or the reason for the panic what with the whole sky is falling along with ASPs thing. Nah, quad witching maybe. 

it may have been the quad witching.  i don't fully understand how options work, but i understand it requires stocks to be bought and sold.  However, options do not expire until the next day, so this must be brokers & MMs transacting ahead of expiration to settle up accounts somehow?  

I messed up buying calls Friday and wound up with 35 calls expiring in the money.  Oops.  So this morning I had 3500 extra shares.  Yikes!  Somehow my margin allowed this but I was trembling... PLEASE GO UP.  The solar gods listened and sent FSLR up 50 cents or so and I sold those shares like a hot potato.  Wound up making a little something on the deal too.  Then later we broke over 52 and something.. wish I'd held on, but could not afford to be long that many shares if it dropped.

 

Anyhow... its good we are turning positive again.  Hope we can stay that way for a little while.  rest of market seems to be acting giddy and crazy, so hopefully some of that bleeds over.  FSLR is a tech company too!

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1 hour ago, sunnypease said:

i FSLR is a tech company too!

Ha, yeah... this is something that's ticked me off since I started with solar.  We aren't considered energy (unless energy is selling off, then we are) and we aren't considered tech or this would be Tesla-like.  Just a commodity I suppose.  May as well be trading soybeans.  Here's hoping we get some follow through tomorrow.  I really need to unload and was hoping to do so much closer to 60.  Biggest trading snafu of my life is what this decline has been.  Set your stops, I know, set your stops.  Burned.  Bad.  

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CS upgrading FSLR to neutral.

 

 Section 301 Fears Overblown: Solar manufacturers and developers,

including FSLR, reacted negatively on Friday 6/15 (down 3-7%) owing to concerns that the fresh round of 25% tariffs on Chinese imports (under Section 301) will raise module prices for developers and squeeze margins for manufacturers. Solar cells and modules are listed in USTR's new list under subheading 8541.10.00 ("Diodes for semiconductor devices, other than light- emitting diodes"). However, we believe the negative reaction is overblown for the space, as c-si manufacturers are supplying solar products to the US market from their Southeast Asia factories, which were set up in prior years to circumvent the ~30% Antidumping (AD) and Countervailing duties (CVD) imposed by the US on Chinese imports after 2014.

 ..for FSLR as well: The negative reaction for FSLR is even more overblown, as the company doesn't have any Chinese factories (they are in Ohio, US and Southeast Asia) and instead stands to benefit from tariffs on competing products. That said, we still embed $2.60/sh for pricing benefits that resulted from separate Section 201 solar tariffs that were announced in January; this value would be at risk should the US soften or eliminate these tariffs as a negotiating strategy. See our 4/9 Trade War Impacts–Renewables and Utilities are Both Insulated and 6/6 FSLR: Near Term Protected, Long Term Still Needs Proving.

 Valuation: Our $53 TP remains unchanged and is based on a multi-stage valuation, including DCF through 2022 and P/E and EV/EBITDA for core business thereafter. We see potential downside of $2.6/sh should Section 201 tariffs be eliminated and another $3/sh if firm-price bookings face cancelations. Our Grey sky value of $35/sh gives no value to growth from Series-6 deployment. Key risks include Series 6 production ramp, cost reduction, oversupply, and changes in US trade policy.

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