Friday, August 21, 2009

Revisiting First Solar

On April 30, I dumped FSLR at 188. At that time, Wall Street was all over the stock.

I wasn't. I said this:

I just can't get a handle on FSLR's cadmium leakage issue. In their annual report, they only had a current accrued warranty liability of $4 million, and excluding their largest customers, all other customers combined are less than 10% of sales, so the replacements of panels is obviously not a material issue, but I needed an excuse to sell, so I took it.

Knowing when to sell, is as important as knowing when to buy.

Now today, we heard a ton of cautious commentary on FSLR, and this number closed down 8.88 at $121.54.

Today Jeffries cut the ratings of the solar stocks.

Yesterday it was Merrill Lynch/BAC cutting FSLR, along with Deutsche Bank.

A few days before that Credit Suisse put out a sell on FSLR.

Last week, Barron's questioned FSLR's accounting---it needs to be questioned.

Piper Jaffray and Soleil were also cautious.

Where were these highly paid shills for the six weeks FSLR hung at 180-200 in May and June? Why couldn't they be cautious then--or tell you to sell?

As you know, I think oil is going higher. And it is.

And now I'm starting to look at First Solar again. But I need to watch it trade a little bit more. It's just that I'm just starting to watch it more closely.

Because the market will tell you when it is time to buy.

Not Wall Street.

Because that's just how Wall Street works.


Anonymous said...

Hey I'm a big oil bull, but I think it is incorrect to assume that solar stocks follow oil prices. Doesn't solar energy compete with electricity and that comes from coal and nat gas? Nat gas is making new lows due to storage issues, we may see a generational low in a month or two.

I think the drillers are a better play on higher oil or the leveraged junky E&P companies :)

palmoni said...

I'm in the drillers!

It is incorrect to assume that the solar stocks follow oil, as you said but FSLR doesn't trade that way.

It trades more on flow--and if someone needs to buy solar, the only real choice they have is FSLR or the speculative names.

I think they go with FSLR--that being said --I haven't bought it yet--But I had to mention it since I like CCO at 6.66, GCI at 7.77 and FSLR--well it was down 8.88.

I'm looking at nat gas--I think you're right with that call

Anonymous said...

So where is oil headed?

There's got to be a line in the sand, beyond which the oil speculators get their heads chopped off, and the S&P is allowed a meaningful correction. Too many people without jobs and credit to allow $4 gasoline again.

Some think $100/barrel. I think that's too high. Oil in the 80s will send gasoline over $3/gallon, which is where the pain starts.

Peter Grandich is hoping for a dream-come-true short at $85.

What do you think?

Palmoni said...

He could be right on that if it spikes.

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