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Energy Conversion Devices (ENER) Message Board

  • prashanth_cherukuri prashanth_cherukuri May 30, 2008 5:43 PM Flag

    Perfect short candidate , cos of high P/E

    Why would someone buy this when they can buy LDK, STP at a much lower risk?
    When the market crashes, this goes to 40 without a stop.
    No point being greedy. Look what happened to YGE earlier.
    This one's going up for no good reason.

    Disclaimer: no position, but will buy June 60 puts on Monday.

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    • i agree with u

    • <the daily news>Plant 1 began production in November 2007 with Plant 2 still undergoing construction. DiDio said the community can expect the second plant to begin production this summer, though "it gets a little dicey since (they're) expanding as well."
      </the daily news>

    • I think we are close.. Morelli indicated that 60mw would come on line in CYQ1 2009, which has to be those two. Worth looking at.

      I agree churnout speed is interesting possible 'wild card' Morellis comment about the 10w (and higher wattage in the lab and his comment that 'nameplate capacity doesn't mean' much' were curious but way too vague to try to model. I stuck with current product and output per line.

    • matthewsnow: To calculate ASP you need a press release, a 10Q won't help. It was indeed $3.02 per Watt in the March qtr. Before that it was $2.94, $3.04, and $2.89.

      Solar product gross margins were 30.7% in the March qtr.

    • <imjocobama>I agree that GV2a and GV2b will start to ramp one or two quarters later than the old manufacturing expansion schedule indicated, because of the construction work at GV2.</imjocobama>

      You're not quite agreeing:

      <Matthewsnow>I figured a little output from that pair in CYQ2 and 2a and 2b would be well into their ramp that quarter. (Those are being pushed out A FEW MONTHS from their earlier projection.)</Matthewsnow>

      I'll have to listen/read again to find out which is most plausible.
      Thanks for this discussion.

      Big unknown is of course also when "churnout" speed is going to increase. But it can only be positive...

    • Thanks for the input.

      I realized after I posted that I had not moved back the two lines that were supposed to be installed in CYQ3 and Q4 2008 into CYQ1 2009. That brought down the CY2009 estimates to somewhere around $4.80. Oops.

      I didn't figure that Tiajuana would be a bottleneck. Interesting point.

      As for the ASP, I just calculated it based on SEC filings numbers.. I'll go back and look at my inputs for a typo.

      I think I had gross margins of around 33% in the current quarter, but I don't have the spreadsheet in front of me. I would think that is achievable.

      I have the two last announced lines (that they are starting on this summer) being delivered one quarter behind the two others (CY Q3 2009). These last two are the ones that they said in the expansion press release would be ready by 'the end of FY2010'. Either they are going to proceed slowly on those (possibly since they have four lines ahead of them) or they are being conservative.

      There is guesswork involved with this many changes in the company and the industry. All in all it looks like earnings go up the next two quarters, flatten out, then go up a lot in CY 2009 due to all the capacity coming on line. I'll take it, but I'd guess stock price growth will occur in 2009 (if they execute and ASPs don't crater) rather than this year.

    • >>I do agree with you that sentiment is important and causes a large amount of price swings. I just believe that over time 'reversion to the mean' (and I use that loosely, but you know what I mean occurs).

      Warran Buffet agrees, but he assigns as much as 20-years of waiting before a stock will revert to its mean. Thus, he has held some companies shares more than half his lifetime.

      Do you wish to wait that long? Many here have DIED waiting...

      Most actually. You should have been on this thread 5 years ago when i was - the players were mostly long-term holders like yourself waiting for "reversion to the mean" theory to work - and I believe most of them are now DEAD.

    • Putting together the press article with what Morelli said, the two machinas they are starting this summer will be installed in CY2Q. I figured a little output from that pair in CYQ2 and 2a and 2b would be well into their ramp that quarter. (Those are being pushed out a few months from their earlier projection.)

      I am assuming, although he didn't state, that the other two they are starting just after the first pair would be installed in the second half of CY 2009. So they are anticipating significantly decreased install time.

      There is a lot of new capacity being installed then in CY2009, 60mw in CY Q1, 60mw in Q2,and 60 more soon thereafter.

      I had the last two machinas producing at 90% in CYQ4 2009, not full capacity. I should cut that back to maybe 70%, reflecting a two quarter ramp.

    • Matthew: If you have not learned by now, you soon will that Demi and ECD.Nofan are always right, never or almost never tell a lie and invented every good thing from sliced bread to round snuff boxes.

    • Re the PE of 14 statement. Yes, I did put that in, but only for reference, calculating from future estimates and current price. What I was referring to was that I was not saying what the PE should be, hence not saying what a PE derived price would be.

      I do agree with you that sentiment is important and causes a large amount of price swings. I just believe that over time 'reversion to the mean' (and I use that loosely, but you know what I mean occurs).

      There are a few fascinating things with this industry and stock. We are seeing in a few years that occur in other industries in decades. That means risk, and winners and losers. I think that high margin producers will be the winners and will be valued accordingly (and the market to date has acted similarly).

      If ENER keeps lowering costs and increasing margins, then they get rewarded by higher earnings AND a higher multiple, since the future prospects are that much brighter (and risk lowered). Note that I'm not saying that will happen but that's what I'm monitoring. It is all about margin and output.

      High cost producers will be killed next year.

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