my comments on FSLR 1Q11 results:
1. ASPs are falling, inventory is rising, and I expect this to continue. In any cyclical industry, a downturn starts with inventory building.
2. nobody else in this industry will report 46% gross margins this quarter, or anything close
3. disappointing, that manufacturing costs didn't decline
4. I predict they have to cut full-year 2011 EPS guidance, at some point.
5. Their Systems business, a captive downstream market, will allow them to keep running their factories at 100% capacity. Solar companies without a Systems business won't do as well.
6. The stock has been doing a random walk, mostly in a $110-160 horizontal range, for 2+ years (while the S&P500 doubled). I'm getting more confident, FSLR will hit 100$ again, sometime in 2011.
7. I am firmly in "wait and watch" mode. I won't buy tomorrow's dip, in FSLR or any solar.
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