Tue, Sep 16, 2014, 12:07 AM EDT - U.S. Markets open in 9 hrs 23 mins

Recent

% | $
Quotes you view appear here for quick access.

GT Advanced Technologies Inc. Message Board

  • tienxia0 tienxia0 Jan 4, 2014 1:09 PM Flag

    Question for Haschultz1 and Solarfinancethinker?

    Haschultz said the following:

    --"I do wonder how the market and retail investers will react to the 4Q 2013 and 1Q 2014 EPS reports which we know are going to be pretty ugly. Those who understand the story will probably hold but how will these ugly reports attract many new buyers who will wait until we are either right at the exit of the tunnel (good forward guidane and/or announcement of more orders being actual revenue) or we are actually out of the tunnel in the sun."

    I had been following GTAT for about 8 years, and then took losses on the big decline in 2011-12. No positions since (unfortunately). Will be taking a position this year, but haven't been following closely. I was surprised (and pleased because I didn't yet have a position) - that GTAT didn't move up as much as I expected with the final AAPL JV announcement.

    Would Haschultz and/or Solarfinancethinker be so kind as to highlight the reasons for why you both think Q1 & Q2 will be disastrous?

    - Is it the dwindling prospects of HiCz?
    - Or that SPWR already has gotten their high-efficiency solution to market already
    - Or the depressed commodity pricing env't for Chinese-based solar panels?

    Thanks for your intellgent postings here.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Hey tienxiao,

      You copied perhaps the most relevant bit from my post which, for reference, was:

      --"I do wonder how the market and retail investers will react to the 4Q 2013 and 1Q 2014 EPS reports which we know are going to be pretty ugly. Those who understand the story will probably hold but how will these ugly reports attract many new buyers who will wait until we are either right at the exit of the tunnel (good forward guidane and/or announcement of more orders being actual revenue) or we are actually out of the tunnel in the sun."

      cold_beef_cake says the market is forward looking which is true.........but who will be the new buyers to take GTAT higher. And, if the stock is not moving higher, why buy in?

      Now, I'm not saying I am correct as I did not anticipate the past two days of upward action; the first on a down market day and the second on a price reversal.

      Having written this and read solarfinancethinker's list of reasons, I would only re-emphasize his as he has them covered. Read the 3Q 2013 Conference Call transcript and you will hear Mgmt say:

      - Solar/PV is all second half 2014 & 2015 so not much revenue when you consumer your own sapphire furnaces

      - Ramp up costs are going to be significant with little revenue to offset them

      - Seems everyone is way too optimistic on start of sapphire deliveries.......so more opportunity to disappoint than to beat.

      - Again, due to the optimism, all surprises will be generally be negative surprises

      - Diamond sawing is wasteful, costly and probably not factored into the contract so Hyperion HAS TO WORK for GTAT to benefit from the Apple contract

      - Hyperion and HiCZ are unproven but again optimism seems to outweight pessimism

      - Apple squeezed GTAT margins on large scale manufacturing which they have not done

      But, I basically agree with solarfinancethinker's list. I think GTAT comes out the other side in good shape but they have a lot to get set up and working efficiently and 4Q 2013 & 1Q 2014 will scare new investors

      • 2 Replies to haschultz1
      • Thanks Haschultz1 and Solarfinancethinker for your articulate, well-thought-out responses.

        Agreed about AAPL squeezing GTAT's margins (GTAT agreed to it just to make the deal happen). But let's figure that the AAPL JV was a way to bootstrap GTAT into BIG volume sapphire production.

        The cost efficiencies that GTAT will no doubt develop by being the largest volume sapphire producer in the world will hopefully lead to other smartphone screen deals with the majors at much higher margins. That's my hope, but it's a long haul to get to that point. I plan to put at least $1M into GTAT at some point -- the question is when will be the nadir in GTAT's share price.

      • Who says hyperion is unproven? Unproven to us, yes, but I think apple saw enough proof to make the deal they did.

        Also, I know it has been frustrating to see HiCZ continually pushed out but that is not because it is unproven. GT had an HiCZ facility in St. Louis ready to go in 2012 but no takers because of the glut in solar panels. They have continued to make improvements to HiCZ since then and when the tariff situation is settled HiCZ will start delivering the payoff on the R&D $'s spent.

    • Market is forward-looking. Why sell on results that don't include future booming business, and don't tell me it isn't going to happen.

      • 1 Reply to cold_beef_cake
      • Hey tienxia0 --

        My assumption is that the first half of the year will be ugly.

        First, but for the Apple announcement, the numbers in last quarter were dreadful.

        Second, management told us that they are generally thinking $600M to $800M for 2014. Logic tells you that the bulk of that will be sapphire material sales (I think they said 80%) and one would assume that GTAT will not be in a position with the Arizona plant to make meaningful sales until Q2 at the earliest, and most likely in Q3 and Q4.

        Third, manufacturing ramp up costs tend to be high and front loaded. Thus, I suspect that costs will be high in the early half of the year.

        Fourth, GTAT has not done this type of manufacturing on a large scale. I would not rule out some hiccups.

        Fifth, SolarWorld just filed a tag on suit to the US solar trade sanctions. Absent a settlement along the lines in Europe, I would think that the uncertainty continues for Chinese solar panel manufacturers, meaning financial backers may not be willing to risk funding new equipment.

        Sixth, I believe (but you should confirm) that management indicated that the other legs of the stools might not be meaningful until late 2014 or 2015.

        Seventh, as you surmise, I'm not optimistic on HiCZ (which is ironically why I originally became interested in GTAT). They do not even remotely suggest a nibble on this technology and other competing technologies exist and will likely arise before HiCZ can take root. (SunEdison has said it has a 20% efficient panel in mind for 2015 or 2016 and 40cents per watt cost -- 440 goal!)

        Eighth, GTAT management says expect next to nothing from silicon.

        Ninth, poly equipment is the wild card. I just do not know to what degree the trade battles will derail sales.

        Tenth, absent Apple approval, I doubt GTAT will be able to provide much forward looking color.

        I'm optimistic longer term, but with the convertible and bad numbers, I don't know that the stock price won't languish.

    • Correct me if I am wrong, but it seems like in summary we can expect a pullback in the next half year. If so, why not take profits and buy back in on a dip? In fact, when I look at the historic Yahoo finance chart, it seems we are ready for a cyclical dip, particularly in lieu of poor quarters ahead.

      By the way, if I had $1 million to deploy in GTAT like tienxia0, I'd contact and pay an actual analyst in the relevant sectors. Mind you, the information on this board is solid. But tienxia0 could do well to cross all his bases...and report back to a grateful audience here.

      For my part, I have contacted a solar analyst today, via a colleague. I initiated an email inquiry. I'll share whatever I learn, which I hope is concisely substantive.

 
GTAT
11.88-0.94(-7.33%)Sep 15 3:59 PMEDT