Trading Solars

[Mark 15]

11 minutes ago, Klothilde said:

There's also a secret force called PB. It pulls FSLR up and CSIQ down.

Spent some time on the Contrarian Investor forum this weekend.  I now know to discount pretty much anything Klothilde says as fear mongering and FSLR pumping.  Had those poor JKS/CSIQ chaps listened to her advice earlier this year, they'd have lost a ton of money instead of making quite a bit.

[dydo 1,501]

24 minutes ago, Klothilde said:

There's also a secret force called PB. It pulls FSLR up and CSIQ down.

PB  as in price book? SPWR leads in it and FSLR is higher than CSIQ.

[Mark 15]

And since when has the market cared about PB when it comes to solar?  That's something I see pumpers quote on Stocktwits.  That number has never given me comfort once I realized it meant nothing to solars.

[solarpete 62]

1 hour ago, Mark said:

I now know to discount pretty much anything Klothilde says as fear mongering and FSLR pumping.

Let's be careful here.  Yes, Klothilde definitely has a pro-FSLR viewpoint.  But just because someone says something we don't want to hear, doesn't mean it isn't correct.  It doesn't necessarily mean it is correct, either--it does mean we should pay attention and examine the argument, lest we get blinded by our own optimism.  Look at her numbers, and decide for yourself if the argument is rational (based on logical conclusions from verified numbers) or not.  Ask for help from others on this forum if you're not sure--that's why we're all here, and folks like Odyd and Explo are great at sharing calculations.

As we all know by now, solars don't always go up in a straight line.  In retrospect, I certainly wish I had listened to a few naysayers at certain times along the way.  I may disagree with them, but ignoring them completely just because they say something I don't want to hear is a mistake I will not repeat again.

[sunnypease 19]

Oil is above $60 and all these energy stocks are going bananas. 

[Klothilde 4]

16 hours ago, dydo said:

PB  as in price book? SPWR leads in it and FSLR is higher than CSIQ.

I just did the crunchies and it so happens that right now both FSLR and CSIQ are  trading at the exact same PB of 1.2

Peace on earth, finally.  If you believe both companies deserve  to have the same PB then today is your day.

I'm just pointing out PB as food for thought for the voices that say "OMG CSIQ is so horribly cheap compared to FSLR !!!".

I would say there are investors who care more about immediate EPS and  then there are other investors who want to see equity and tangible assets.  I would say both need to be considered and that the market in sum cares beyond EPS over the next 12 months.

A positive thing for CSIQ from a PB perspective is that imo it has a higher chance of relative equity growth over the next two years compared to other companies including FSLR.  Where do you think equity can go over the next two years from the current $927M?  Can we have say 50% appreciation to $1.5BN?

 

[dydo 1,501]

1 hour ago, Klothilde said:

I just did the crunchies and it so happens that right now both FSLR and CSIQ are  trading at the exact same PB of 1.2

Depends on where you look, I think you forgot to take intangible assets out for both. Yahoo sees 1.23 for FSLR perhaps after $93M of those are taken out.  They see 1.17 for CSIQ in the same stat.

I am glad you mentioned positive thing for CSIQ and its equity. Book for Canadian should grow by 34% in my estimates. If CSIQ gets this 1.23 ratio, that is $26 per share.  To me, PE is what the company can do and PB is what it did. It is hard to take PB and assess the future.

I also think PB does not reflect the real value of solar companies. In my view in connection with EPS, PB should be higher to at least 1.5. SPWR is at 1.68 of it so people do not mind paying, while in case of SPWR they will get burned. 

[Klothilde 4]

10 hours ago, dydo said:

I also think PB does not reflect the real value of solar companies. In my view in connection with EPS, PB should be higher to at least 1.5. SPWR is at 1.68 of it so people do not mind paying, while in case of SPWR they will get burned. 

I don't know.  I interpret a low PB as a lack of confidence in future earnings growth.  The market is telling us there ain't much profits in solar over the next years.  Does this make any sense?

[sunnypease 19]

Looks like Enphase is doing a little better?  Beat their EPS target (adjusted of course), but next quarter guided down an equal or greater amount.

http://newsroom.enphase.com/releasedetail.cfm?ReleaseID=1047605

[dydo 1,501]

4 hours ago, Klothilde said:

I don't know.  I interpret a low PB as a lack of confidence in future earnings growth.  The market is telling us there ain't much profits in solar over the next years.  Does this make any sense?

That is different. I think of low PB as undervalued. However, disparity within industry indicates to me inconsistent valuations. In this spirit, higher PB would mean an approval for long-term prospects, interest in the growth. 1.5 is a somewhat conservative number. The stock I bought for growth trades at 11 times book.