Thought it might pull back some more, but I lost my patience. Probably I will regret that, but I have cash to add more, and might consider it. This time I am more likely to hold on for a longer-term turnaround. The technicals look good to me, and I think the company's business in the process of picking up.
REG is fine, but I don't think it will do much to decrease cash burn. I am more interested in their wind and dvar business hopefully improving. Inox is obviously going to be growing. They really, really need to see JCNE business pick up too.
good luck to all.
I'm not one to count on the foolishness of the shorts. Seen way too many people screaming that the shorts are idiots as the stock continues to tank and tank.
That said, I do not short, and if I did I would not chose this stock. I may go long again soon.
But it seems to me if a squeeze were to happen as a result of the REG project, then we would have seen a follow-through on Wednesday's action.
Here's what I see happening: YoY comparisons in the coming quarters will be less than impressive. Cash burn continues, dilution continues. But there will be more good news, and hopefully the market will be looking forward to next year. The stock has seen its worst days.
Short covering will be orderly. Just my guess. Good luck
The reaction to the REG announcement was a bit over-bullish, imo. Revenue for this is far in the future, and apparently it will not significantly improve cash flow. It's cost-share.
But yes, it's good news, and along with Inox the company's outlook is finally looking better.
It took me by surprise that REG happened this soon. McGahn had said "sometime this year," and me, always erring on the skeptical, thought it would be later rather than sooner. I also was not expecting such high volume in response. I wonder how many of those shares were put out there via the company's ATM? If the company was smart, they would have taken advantage.
I think it's been expected. More significant is the good news recently that a key senator will probably block a change to the country's renewable energy target. Excerpt from the NYT:
SYDNEY, Australia — Opposition politicians and environmentalists in Australia reacted with dismay Thursday to the country’s repeal of laws requiring large companies to pay for carbon emissions, saying that it made Australia the first country to reverse progress on fighting climate change.
The Senate voted 39 to 32 on Thursday to repeal the so-called carbon tax after Prime Minister Tony Abbott’s conservative government secured the support of a number of independent senators. The House of Representatives had voted earlier in the week to repeal the unpopular measure, which has been a highly contentious issue in Australian politics for seven years.
The tax was devised to penalize hundreds of Australia’s biggest producers of carbon emissions, setting a price of 23 Australian dollars, or $21.50, per metric ton of carbon dioxide when it was put into effect in 2012 under then-Prime Minister Julia Gillard of the Labor Party, which is now in the opposition. The price rose to 25 Australian dollars this month.
Mr. Abbott, of the conservative Liberal Party, who took office in September, made repealing the tax a central pledge of his election campaign, arguing that ending it would reduce electricity prices and enhance economic growth. But he struggled twice to get the measure through the Senate before the vote Thursday. The government now plans to introduce a range of measures that it says will encourage business to reduce pollution, rather than penalizing polluters.
After the vote Thursday, Mr. Abbott characterized the tax as a “useless,
Inox Wind gets SEBI approval for IPO
BY BHAWNA GUPTA
… When it originally applied for the IPO last year, Inox Wind had sought to raise around Rs 550 crore through fresh issue of shares besides offer for sale by its promoters. Almost half of this was to be used for securing long-term working capital requirement and the rest was to be used to spruce up manufacturing capability and invest in a subsidiary involved in turnkey solution provider for wind power projects.
Last week, a top executive of the firm had said it may look to raise Rs 1,000 crore this fiscal as it awaited SEBI approval to the issue ...
My comment. They are upping the amount to be raised. It could be that they will add more capacity than originally planned. But, remembering that Inox just had a major fire at their blade factory, the larger offering could be to help cover the cost to rebuild.
You can read the entire complaint related to the WSJ’s story by cutting and pasting the following into a google search:
SECURITIES AND EXCHANGE : COMMISSION, : : Plaintiff, : : v. : Civil Action No. : ERIC J. McPHAIL, : JURY TRIAL DEMANDED DOUGLAS A. PARIGIAN
It is not big news. I suspect it’s the same insider involved in two previous cases, but the SEC’s net just got a little bigger and bagged a few upper-middle class cronies who made a few easy bucks on someone’s loose mouth. Yes, I know I’ll be criticized for concentrating on the little issues, but I’m not asking anyone to concentrate on this. I just think it’s interesting reading. Read it or don’t. It’s up to you.
I think stuff like this happens all the time, but usually no one gets caught. I have a theory on how this investigation came into being: When the DoJ was making their case their case against Sinovel, it’s possible they were interested to see if they could implicate any Sinovel execs or other Chinese nationals for trading amsc stock with inside info. So they could have checked into who was shorting amsc immediately before the Sinovel fallout was made public. Instead of implicating China, what they found was an amsc executive who bought puts. That info could have been passed on to the SEC. Now it’s just a matter of whoever is in charge of that investigation doing his job and digging deeper.
Just a theory. Good luck to all.
Two previous Sinovel CEO's resigned in the last few years, and each time posters on this msg board speculated that a settlement was around the corner. Wishful thinking.
This resignation comes close to Sinovel's next earnings report. Could mean news will not be good. There has been speculation in the media that Sinovel could default on their bonds. Sinovel showed improvement in their sales last quarter, so that offered hope that the company could turn around. Those hopes could be either confirmed or dashed by their next earnings report. The CEO resigning at this time could mean something ... or could mean nothing.
Sinovel last reported a cash balance of about $470 million. If the cash burn continues, then the window for a meaningful legal reward or settlement for amsc is closing.
Inox Winds aims to raise $165M through IPO this fiscal
The firm aims to execute orders worth 500 MW by this fiscal which may translate into a top line of Rs 3,000 crore in FY15.
Optimistic about the next wave of growth in wind power, the USD 2 billion Inox Group is looking at the capital market for Inox Wind Ltd to raise around Rs 1,000 crore by this fiscal.
It would be the third entity of the group to get listed.
"We are looking at raising around Rs 1,000 crore from the market. Our merchant bankers have indicated that we may get the approval from regulators soon. We may list it by this fiscal," Inox Wind Ltd director Devansh Jain told PTI.
He said the company will dilute only a minority stake in the proposed public offer.
Wind power solutions providers since 2010, Inox Wind is a subsidiary of listed Gujarat Fluorochemicals. The other publicly held company under the group is Inox Leisure.
Jain said the new government is giving a major thrust to the renewables including wind power and he hoped that a domestic market of wind power projects totalling 3.5 GW will roll out year-on-year.
He said the company expected accelerated depreciation benefit being restored for wind power and a boost for this form of renewable energy industry to come out of sluggish growth seen in the last 2-3 years.
"We have generation based incentive now and do not see any reason that accelerated depreciation benefit being restored as government has recognised the issue," Jain said.
Despite odds the the industry trend has been bucked and is profitable since 2011, Jain said.
Speaking about application of the Rs 1,000 crore proposed from the IPO, Jain said the fund will be used for ramping up capacity, increasing land bank and enhancing power evacuation infrastructure, meeting working capital needs and other corporate purposes.
I dont know, sigur. I'm just back in "watch" mode now. Could even buy back in at a higher price if it looks right ! Wait and see how the stock behaves, and probably wait for after earnings to see if I get a better feel for things.
I'm convinced that REG is not the thing to get excited about. Yes, an announcement of a REG order could pop the stock, but revenue is so far away the pop won't last, imo. Plus that, I'm beginning to believe this is going to be another DHS project. (I don't know) If it's funded by DHS, then this is not the beginning of a commercial market.
Coming improvement in amsc's non-superconducting businesses is what encourages me.
Today at 1.69. 16% profit on shares held about a week.
It seems for the last few years to poke its head above the 200dma and then give up. These patterns never last forever, and I could be making the wrong call. If it runs, I'll regret selling but I'll be happy for ya'll still holding. I aint greedy.
good luck to all
By Ben Backwell in London Wednesday, July 02 2014
Updated: Wednesday, July 02 2014
Japanese motion control and robotics company Yaskawa has signed an agreement to acquire The Switch, a leading supplier of permanent magnet generators and full-power converter packages for the wind industry and other renewables sectors.
The Switch says the acquisition "will support both companies' strategic objectives and strengthen their international presence."
The deal is expected to close within "a few weeks", The Switch says.
In Autumn 2013, the two companies entered into a strategic collaboration agreement which gave Yaskawa access to its megawatt-class power generation, while allowing The Switch to develop its presence in the growing Japanese market.
"This acquisition is a natural next step forward from our initial strategic collaboration," says Hiroyuki Ougi, Yaskawa's corporate senior vice president, general manager, System Engineering Division.
"Now we can both gain access to new global markets with our wider range of innovative products."
"From our customers' point of view, this acquisition ensures global availability of The Switch offering," says The Switch president and CEO Jukka-Pekka Mäkinen, who is a member of Recharge's Thought Leaders Club.
In March 2011, The Switch reached an agreement to be acquired by US power electronics and wind turbine design firm AMSC.
However the deal fell through in October that year after AMSC suffered the effects of its traumatic falling out with its main customer, Chinese turbine manufacturer Sinovel.
The Switch retained a #$%$14.2m ($20.6m) advance payment that was made by AMSC in June in order to extend the preliminary sale agreement between the two companies.
The March 2010 LS Cable announcement described the agreement as being “to deploy more than 50 kilometers (km) (31 miles) of superconductor power cables in commercial power grids over the next five years” The prototypes you mention account for maybe one-fiftieth of that amount. Obviously, the agreement no longer survives in the same form as it was described in 2010.
You have pointed out many times in the past that fulfilling the LS Cable agreement would take high volume production of HTS wire. You've cited a particular quote that 2g wire is only now available in large quantities, and you've looked forward to what you call the "new production line" as an important event.
Now read carefully the words of the CEO in the last conference call:
“REG represents what AMSC will be in the coming years. The REG system solution demonstrates A FUNDAMENTAL SHIFT TO OUR STRATEGY AROUND SUPERCONDUCTORS. PREVIOUSLY, WE’VE BEEN FOCUSED ON INCREASING WIRE SALES AND USING VOLUME TO DECREASE COSTS. With the REG system, we will be selling a full system solution providing revenues in multiples of the wire value. This means that we need to sell less wire for our superconductor-based product line to contribute to profitability.”
(The caps are mine.)
It looks to me like they’ve given up for the time being on the idea of selling large volumes of wire. I don’t deny that there could continue to be a trickle of sales to LS Cable. But the 2010 plans to deploy 31 miles of cable in Korea apparently no longer exists.
I believe It was part of one of China's recent economic plans to start manufacturing wind turbine power converters domestically. Sinovel's attempt to steal amsc's IP and develop their own power converter via Guotong Electric was (in my opinion) probably done with the actual or implied consent of the Chinese Communist Party. It was a "national interest". (Which is the main reason I am highly doubtful anything will come of any of the legal actions).
I was surprised to see in the following link that 95% of wind power converters in China were still being
supplied by foreign corporations at the end of 2013. If true, then apparently, China's designs to go to
domestic production have not made much progress yet. google the following:
Wind Power Converter Industry in China 2016 Forecasts
cut and pasted:
"China’s domestic wind power converter manufacturers started late on the business.
By the end of 2013, foreign players dominated about 95% of China wind power converter market,
with ABB, Converteam, AMSC and Emerson being the leaders. Domestic Chinese companies chiefly
involve Beijing Corona, Sungrow Power, Hopewind, Zhuzhou CSR Times Electric and Qharvest.
At the end of 2013, Sungrow Power, Hopewind and Zhuzhou CSR Times Electric had wind
power converter capacity of 1,000 sets/a each."
end quote. Interestingly, Guotong is not even mentioned here. Perhaps that effort was a total flop.
"$80 million will be spread out over 12 to 18 months from the time the revenues acutally start"
amd, that statement is not correct. McGahn said they wouldn't get any revenue at all until 12 and 18 months after the order is recieved, (I think that's where you are confusing the 12-18 months figure) After that waiting period, then the revenue would be spread out over "multiple years". He did not specifically say how many years he means by "multiple", but I was assuming 4 years would be close to the mark, looking at how long Hydra has taken to complete. Here are his exact words, according the seeking alpha transcript:
"Meaningful revenue would be expected to occur 12 to 18 months after an order is received. It is possible that a project of sufficient size could result in total revenue roughly equal to our current annual revenue; however, let me be clear – deployment would occur over multiple years"
Your understanding of utilities is not strong in my opinion. They are extremely conservative in adopting new technologies, which is one of the reasons why hts cables have seen no commercial sales yet. If REG is the real thing, its adoption will by utilities will be slow in coming, in my opinion.
Your statement that gross margins will be 25% or better for REG is based on nothing whatsoever, and in my opinion is far too optimistic.
You can't imagine how many different posters have made the same response to me over my hts skepticism over the years. "If you wait till it happens, it will be too late!!!"
I see nothing original about you in that respect. But occasionally you make some interesting observations and I always look forward to your civil and well-thought posts.
Anyway, I do own some shares right now. Partly a technical decision, partly based on business improving several quarters down the road. Technically, the stock held up or went up after a miserable earnings and miserable guidance for 1q. Fundamentally REG did play a role in my thinking (sort of speculative), but I'm more encouraged by Inox and the defeat of the climate skeptics in Australia than I am in hts promises.