I am long on SOL. I love positive posts with sound information. There is no short squeeze possible here because the short position is very small, less than 1 days trading. Also, SOL does have debt. A lot, most long term acquired last year. Keep up the enthusiasm, there are enough verifyable positive facts to move this up without pumping bad info.
I just ran through the same #'s and was scratching my head trying to figure out why SOL is trading at $7.57 with an estimated Q3 2008 EPS of 0.32 (I am estimating 0.40+). SOL is estimated to make $2.19 in 2009
SOLF is trading at $8.65 right now after hours. They are only expected to make 0.17 cents in Q3 2008 and only $1.06 in 2009.
YGE is trading at $6.75 after hours. They are estimated to make 0.23 cents in Q3 2008 and $1.33 next year.
But both YGE and SOLF have significant FX exposure due to the steep decline in the EURO. They also have a less advantageous capital structure than SOL in my opinion. So why is SOLF trading at a discount to these other names?
Because the market makes no sense. Have you not been paying attention the last 2 months? SOLF was a short squeeze today. Check out those numbers instead of earnings. Earnings mean nothing in times of fear. It's all about momentum right now. Hopefully we can keep this up without one of these companies blowing it for their earnings. If 20 solars report great earnings and 1 doesn't, that one company will probably keep down the sector. Sorry to be so cynical. I have to be negative with all the money I've lost in the past year. This thing better hit $20 in the next 6 months.
You are correct my friend. Makes no sense. SOL should be trading at least 50% higher than SOLF. Also, we are quickly approaching 2009 when the p/e is going to be 3 at these levels. For a growth stock, the p/e should be at least 15. Further, poly sil prices have gone down 20 to 30% in the last 3 weeks. Margins will improve.
The difference between SOLF, YGE, etc. and SOL is the former make the panels and SOL makes the wafer which goes into the panel. SOL's competition is LDK and WFR. However, SOL does not yet make the high end, but it will eventually. I'd rather have the company that makes the necessary component part, than the company that sells the entire panel. The panel companies have no choice but to buy from SOL. SOL will not drop prices nearly as much as the panel makers if competition increases. The competition also needs wafers. All panel companies need wafers.
Look at WFR. Look at its earnings report just 2 weeks ago. They make semi's. The best performing part of their biz is solar wafers.