•JinkoSolar stock price has been crushed as if fundamentals are deteriorating rapidly. Yet there is little sign of that happening.
•Top and bottom line beats, increased guidance by 20%, Jinko is solidly delivering and is likelyto do so forthe foreseeable future.
•While general market conditions are difficult and the stock is traditionally very volatile, we see considerable upside from here.
There is a rather massive sell-off going on in JinkoSolar (NYSE:JKS) the market leader in China. Whilst the stock, like many other solar stocks, has always been very volatile, the latest sell-off suggest there is deeper trouble.
The selling accelerated after Q2 earnings were published, not helped by a large market sell-off. At first sight, this was rather surprising because the earnings contained quite a few positives, in no particular order:
•Shipments were 913.4MW, a rise of 38.7% for the year, and up 15.9% from Q1.
•Revenue rose 31.6% to of $516.23M beating expectations by $48.21M.
•Non-GAAP earnings per ADS rose to $1.02, beating expectations by 20 cents.
•GAAP earnings per ADS came in at $0.40, which according to Yahoo was half that of analyst expectations for $0.83. However, we're pretty sure that the $0.83 average analyst expectation was for the non-GAAP earnings (and Zacks agrees).
•The company is operating at full capacity
•In house module cost was $0.42 in Q2 and will fall to $0.40 by the end of the year
•Gross margin was 20.7% in the second quarter of 2015 compared with 20.3% in the first quarter of 2015 and 22.6% in the second quarter of 2014.
•The company raised guidance for the year 2015 by some 20% from 3.3GW-3.8GW to 4GW-4.5GW
Combine these with the following:
Global solar demand remains robust, allowing us to build upon our leadership position in a number of key and new emerging markets. We are well positioned in China as the market leader to benefit from the expected strong demand during the second half of 2015. We also made substantial progress in the U.S. where shipments increased by 115% sequentially [Q2 PR]
And (from the Q2CC)
We expect to see demand improve through the rest of 2015 and even into the first quarter of 2016 thanks to the signed contracts currently in our pipeline.
Their own electricity production, which is a more stable and higher margin business, is continuing to grow strongly, from the Q2 PR:
Solar power output during the second quarter also exceeded our expectations by reaching 203 GWh, up approximately 75.8% sequentially while generating RMB177.9 million in revenue. With the seasonal effects of Chinese New Year behind us and new projects ramping up to full capacity, we expect this higher-margin business to generate an increasing share of the profits during the second half of 2015.
Short Interest (Shares Short) 3,886,700
Short Percent of Float 18.48 %
Short Interest Ratio (Days To Cover) 4.9
Time to make the shorts sweet. Back to $24
Will AAL test $34 again? Will $34 hold?
Activision Blizzard (ATVI), United Airlines (UAL) to Join S&P 500
up $4 in after trade
Looks like the shorts are starting to cover on there short positions, as buyer come in on pretty good volume
The U.S. Energy Information Administration reported monthly production data Monday showing a fall in production to 9.296 million barrels per day (bpd) in June from 9.4 million bpd in May and a peak of 9.6 million bpd in April.
In an OPEC publication issued on Monday, the producer group said it is concerned by the drop in oil prices and ready to talk to other producers.
"As the Organization has stressed on numerous occasions, it stands ready to talk to all other producers. But this has to be on a level playing field. OPEC will protect its own interests," the commentary in the latest OPEC Bulletin said.
Meanwhile, the Kremlin said Russian President Vladimir Putin and Venezuelan President Nicolas Maduro would discuss "possible mutual steps" to stabilize global oil prices as part of Moscow's cooperation with OPEC.
Major reversal in oil as EIA cuts U.S. output estimate
Incorporating new survey techniques for the first time, the EIA pegs June U.S. crude oil production at 9.3M barrels per day, down about 100K from the revised May figure. Production estimates for Jan-May were cut by between 40K and 130K barrels per day, with the biggest revisions coming in Texas and the Gulf.
Prior to this new data, "the magnitude and source of decline has been less than reassuring,” says Morgan Stanley. “However, if the data shows a more pronounced decline in North Dakota, Texas or the interior shale producing states, it could give confidence to a market increasingly doubting any decline in U.S. production.”
Deutsche Bank finds value in the airline sector
Deutsche Bank upgrades three airline stocks to a Buy rating from Hold off of attractive valuation on entry points for investors.
American Airlines Group (NASDAQ:AAL) is assigned a price target of $50 to rep 28% upside potential.
Delta Air Lines is also tagged with a $50 PT which works out to 14% upside potential.
Latin America provided Copa Holdings is set with a $65 PT for 27% upside potential
Imperial Capital reiterated an Outperform rating on American Airlines (NASDAQ: AAL), and cut the price target to $65.00 (from $73.00), as shares trade closer to PRASM commentary near term. For investors with a longer investment horizon, management indicated it expects PRASM trends to turn more positive moving into the second half of 2016 as near-term revenue trends are likely to face similar headwinds as 2Q15.
Analyst Scott Buck commented, "We are maintaining our Outperform rating, but reducing our one-year price target to $65 from $73. Despite reporting the best quarterly results in the industry’s history and guidance suggesting a record 2015, AAL shares, and those of other airlines, continue to trade closer to PRASM commentary near term. For investors with a longer investment horizon, management indicated it expects PRASM trends to turn more positive moving into the second half of 2016 as near-term revenue trends are likely to face similar headwinds as 2Q15, including increased competitive capacity and weaker macroeconomic trends in South America. However, recent operating results and management commentary continue to provide us with confidence in the company’s ability to generate the highest 2015 operating margins and earnings among the legacy carriers. We continue to view American as an earnings story and believe investors should turn their attention to record operating results rather than PRASM. In addition, American’s no fuel hedging policy is expected to result in approximately $4.8bn in annualized cost savings in 2015, the highest of any U.S. airline. We believe the company will continue to pass a substantial portion of these cost savings on to investors in the way of additional share repurchases and the retirement of high interest debt. Our price target represents about 66% potential upside from the recent share price."
Revenue miles up 7.5% for Southwest Airlines in August
Southwest Airlines (NYSE:LUV) reports revenue passenger miles increased 7.5% to 10.3B in August.
Capacity was up 7.6% to 12.1B available seat miles.
August load factor -10 bps to 85.4%.
YTD load factor +70 bps to 83.6%.
The company expects operating revenue per available seat mile will decline 1% Y/Y in Q3.
Told you made a huge mistake. Going back over $50 before earnings come out. Looks like u walk away from BIG $$$.
Mallinckrodt (MNK) Sell-Off Overdone as Competitor Details Lacking - Deutsche Bank (ANIP)
September 21, 2015 11:21 AM EDT Send to a Friend
Deutsche Bank maintained a Buy rating on Mallinckrodt plc (NYSE: MNK) with a price target of $104. Analyst Gregg Gilbert ...