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Non-Tech : Alternative energy -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (7973)	4/28/2010 3:38:04 PM
From: Sam	Read Replies (2) \| Respond to of 16955

On thinking about companies to short in this sector, it seems to me that ENER, ESLR and SPWRA are better shorts than CSIQ and FSLR. ENER is completely outgunned by the Chinese companies; at one time, they were the low cost producers, and the stock had its decadal run, all the up to around 90, I think it was. They have been burning cash like crazy over the past year, and I see no end in sight. Although the stock reflects a good deal of that, down to 7 and change, this could be a company that one could short and never bother covering. ESLR has lost a cost advantage that it once had, and its balance sheet is really really shitty. They are trying to recover by moving production to China and partnering with Chinese companies, but its too little too late. Of course, the stock price is so low already, it isn't worth shorting at this point unless they get a pop. SPWRA is a good company with a good story, but--in a way they are too good a story. They believe their own story, and apparently think that they can sell a TCO story. Their panels have the highest efficiency, but also the highest immediate cost. But their TCO story is over a long period of time, and I don't think most buyers have that kind of time reference when they buy solar panels. Initial cost will trump efficiency and TCO in this market. Every big buyer knows that efficiency of their competitors will be growing and cost dropping over the next few years, and most of them won't be able to justify SPWRA's startup costs, IMHO. They aren't as a good a short as ENER, they have plenty of cash to keep going for quite awhile, but I just don't see them growing much unless they cut their cost structure by a lot. Just my 2 cents.

To: Jacob Snyder who wrote (7973)	5/6/2010 4:05:59 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 16955

BP (British Petroleum): (I thought this would be an interesting comparison to the solar companies I've been evaluating.) PE = 8 PE range 5 to 20 (last 5 years) Earnings and stock trend with oil price. dividend yield = 6.6% = $3.36/51 (payout ratio is 64%) gross margins, 5 year average: 21% share count has been slowly declining, from 21.4B end-2005 to 18.9B end-2009 cash/share $3.90 LT debt/share $7.60 Stock now at 51$. Troughed at $35 in 2003 and 2009, all-time hi $80 in 2007. BP has plenty of liquidity and very little gearing. At the end of March, according to FactSet data, it had $70 billion in current assets, including cash, receivables and inventory, to set against $62 billion in short-term liabilities and $24 billion in long-term debt. Pretax income last year was $21 billion on sales of $241 billion. BP stock is valued at about 0.6 times sales, according to FactSet data. The figures for ExxonMobil and Chevron are about 1 times sales. BP is about 5 times annual cashflow–compared to 8.5 times for Chevron and 9.6 times for Exxon. online.wsj.com Hold Your Nose and Buy BP: shares are off nearly 20% since their Deepwater Horizon drilling rig exploded April 21st. That's around $30b in market cap wiped out in 2 weeks. seekingalpha.com BP threw just about everything it had at the Gulf of Mexico once it became clear last week that oil leaking from a wrecked drilling rig threatened to cause an environmental catastrophe. So far, the company appears to be winning the battle to stop the oil seriously contaminating the shore, but it’s losing the PR war hands down. When the White House boasts that it will “keep a boot to the throat” of your company, and “Daily Show” host Jon Stewart is cracking jokes about you in which the punch line is “Goldman Sachs,” you know you’ve got an image problem. blogs.wsj.com Credit rating agency Moody's said Wednesday it has revised the outlook on BP PLC's (BP) credit rating to negative from stable on the possibility that the company may incur large financial liabilities cleaning up the oil spill in the Gulf of Mexico. "It remains impossible at this stage to assess the full extent of the costs and business impact of this accident on BP," said Moody's in a statement. "While BP's current financial position, which has recently benefited from robust operating results and cash flow generation underpinned by the recovery in oil prices, provides some cushion against the potential financial impact of the incident, Moody's believes that it is too early to exclude scenarios leading to downward pressure on the Aa1 rating," it said. BP is already incurring costs of at least $6 million a day to contain the oil spill and will probably pay another $200 million to drill relief wells to halt the flow of oil from a damaged well. If the oil spill results in significant contamination to the coast of the Gulf of Mexico, which has so far not been the case, analysts say BP's liability could be anywhere between $2 billion and $8 billion. BP does not carry insurance that would cover the Gulf of Mexico spill. online.wsj.com