for those following solar, STP is best of breed. this one is a no brainer. a pureplay that is profitable.
by end of 2006 they will have 240 MW capacity. at $3.20 per watt wholesale, that is $768 million annual run rate. a 15% net margin is $115 million net income, or $.79 per share. their margins are higher than that now, but if they could do that, at 22 the PE is 28. (for 2007)
ok, that is best case. however, they look to be very aggressive in their growth and tapping this market. having a worldwide market, they should be able to sell everything they produce. just in california, the SUBSIDIES for alternative energy are $2.9 billion for the coming 11 years. if the subsidies are about 40% of cost, and the majority of the subsidy being solar, that means $7.25 billion will be spent on alternatives. i would surmise that 80% or the $7 billion will go to solar. the point of this figure is just the CA market is huge. other states, CO, NJ etc also have big subsidies. germany and japan cannot get enough solar product either. natural gas and oil prices are permanently high. solar is the answer, big time, with subsidies.
compare to ESLR, ENER, and SPWR and this stock should be at $60 to $80. adjust upward for business plan, downward for being foreign, and you still have a business that dwarfs those 3. ENER will have capacity for 50 MW in fall 06, ESLR maybe 120 MW at most, some is joint venture, SPWR i do not know. SPT having 120 MW now and 240 end 06 means they are a huge player.
ok, if i am rambling, whatever. this stock is the best solar play hands down. i like ener too, they use a thin film process with very little silicon.
fair value right now at 8 times sales for next year of $576 million is $4.6 billion, that is $31 per share. ESLR trades at 7 times 06 sales estimate and loses money.
this is the GOOGLE of solar power
i call it like i see it.
simeon |
