(This is an excerpt from an article I originally published on Seeking Alpha on April 22, 2013. Click here to read the entire piece.)
Suddenly, I am much more interested in the solar industry again.
In late 2011, I tried to lay out some rules for identifying survivors of the solar recession (see “Using Debt-To-Equity Ratios To Identify Potential Solar Downturn Survivors“). Admittedly, by late January of this year my interest had begun to wane as I moved to protect my profits on a short put on First Solar (FSLR) (see “Shorts Are Still Retreating, But It Is Time to Protect Positions In First Solar“). I closed out the entire position March 4th after it appeared that post-earnings selling momentum would continue. Just a little over a month later, FSLR put heads on a swivel as everyone turned to notice a relatively positive analyst meeting. FSLR shares soared an eye-popping 45.5% in one day. The shares really took off after CFO Mark Widmar provided financial guidance through 2015. The charts below show the daily and 15-min action in the shares:
Source: FreeStockCharts.com
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Overall, I think there are four general themes/claims to highlight from the entire day:
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I think there is also plenty of reason to dress this naked optimism with a cloak of caution. First Solar’s emphasis on long-term guidance and long-term technology and manufacturing roadmaps is clearly intended to communicate the company’s confidence in its future survivability. However, plenty of risks sit between now and a thriving business. {snip}
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Having said that, the company’s low valuation provides some buffer against these and other risks. {snip}
All the top executives of FSLR spoke at the gathering. The star of the show was Chief Technology Officer Raffi Garabedian. {snip}
If it were not for the massive short interest – currently 32.7% of float, betting that FSLR would continue to decline along with the rest of the industry, this analyst day may not have caused such a stir. {snip}
I have posted my notes below along with a little commentary and some re-ordering where it improves flow. {snip}
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Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on April 22, 2013. Click here to read the entire piece.)
Full disclosure: long GTAT