(This is an excerpt from an article I originally published on Seeking Alpha on July 11, 2012. Click here to read the entire piece.)
Almost two years ago, I wrote about Centrohterm Photovoltaics because of big equipment contracts the company signed with state-owned enterprises in China (see “Centrotherm Photovoltaics Continues Its Success in China“). {snip} Now, it is Centrotherm’s turn to feel the sharp pain of an industry in decline.
I first realized something was wrong with Centrotherm when the company warned on June 13th the following:
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Essentially, Centrotherm faced a crippling credit squeeze where insurance companies lacked confidence in the operations and finances of the company (and/or its suppliers!). Almost a month later, on July 10th, the company announced a bankruptcy filing…{snip}
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Centrotherm’s stumble now makes me ever more critical of GT Advanced Technologies (GTAT). {snip}
I have not written about GTAT in over seven months (see “GT Advanced Technologies A Likely Loser in Looming Solar Trade War“), but its recent earnings reports confirmed that the stock market no longer believes even GTAT can remain above the solar carnage piling up all around its customers in Asia. {snip}
As of its last earnings report, GTAT reported record revenues and earnings. Yet, the market responded with a 16% sell-off that took the stock to fresh three-year lows. The company continues to insist its massive $1.8B backlog is secure {snip}
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With its eyes firmly locked on the future, GTAT plans a 50% year-over-year increase in R&D spending. {snip} With $351M in cash and cash equivalent and only $75M in debt, I am also hanging in there with GTAT. But the rash of bankruptcies in the industry are starting to lap a little too close for comfort…
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on July 11, 2012. Click here to read the entire piece.)
Full disclosure: long GTAT