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GT Advanced Technologies, Inc. Message Board

solarfinancethinker 81 posts  |  Last Activity: 2 hours 30 minutes ago Member since: Dec 31, 2013
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  • Reply to

    SUNE target price $44

    by rand5022 May 22, 2015 10:03 PM
    solarfinancethinker solarfinancethinker 2 hours 30 minutes ago Flag

    Well said toast. Although I think the solar traction will be steady, there is some risk that accelerated deployment might cause such utility industry disruption that credit ratings drop, making PPAs less attractive in a yield co. That risk seems low for regulated utilities as costs tend to get passed along to customers.

  • Reply to

    SUNE target price $44

    by rand5022 May 22, 2015 10:03 PM
    solarfinancethinker solarfinancethinker 8 hours ago Flag

    Apart from broader geographic base, I can easily see SUNE gaining relative strength if the ITC disappears as I suspect many smaller players will exit or be sold for bargain basement prices. Because of SUNE's tech agnostic approach and because it and several other large players are likely to have better access to capital, it would not surprise me to see SUNE acquire lots of good assets on the cheap.

    SUNE is a finance company, and it will become more and more efficient in structuring transactions. I recall thinking 2 or 3 years ago that SUNE could really position themselves sort of like Freddie Mac and Fannie Mae did in the mortgage market. A favorable financing model enabled there long run and high growth rate until the market collapse in 2008.

    SUNE is not without risks, but it is hard to find better opportunities. I suspect you will see SUNE reveal major plans in the storage markets over the next couple years as certain segments offer better payback that solar alone. I suspect you will also see SUNE upgrade systems -- but I wonder to what extent TERP gets all the full upside from upgrading or whether any portion must be shared. I may ask TERP IR at some point.

  • solarfinancethinker by solarfinancethinker 8 hours ago Flag

    Anyone with serious money in IPWR or even thinking of such might want to take a peak at energystoragenewdotorg and cleantechnica websites. Greentechmedia also worth reading religiously. Tough to keep up with it all....

    Anyone have any other must read cites?

  • Reply to

    SUNE target price $44

    by rand5022 May 22, 2015 10:03 PM
    solarfinancethinker solarfinancethinker 8 hours ago Flag

    Concur Toast -- SUNE's large presence in EM is why I have sold SPWR and SCTY, both of which I held much smaller interests in. At one point about 2 or 3 months ago, I had the opportunity to convert SCTY to SUNE on a 3 to 1 basis. I did not because it left me to with too much in SUNE. Oh well, missed that boat on adding, but I was in long before the hedgies.

  • Reply to

    SUNE target price $44

    by rand5022 May 22, 2015 10:03 PM
    solarfinancethinker solarfinancethinker 10 hours ago Flag

    Toast -- Please bear in mind that 4Q 2016 is the last Q for ITC at 30% rate unless extended. Most see a dramatic fall off in 2017 in US activity. SUNE is better insulated than others. My point here is that $3 or $4 run rate as of 4Q end is probably substantially built upon the US development business. Please advise if you think otherwise. By the way, it doesn't change my outlook here, but I don't think the whole story is being painted here.

  • solarfinancethinker solarfinancethinker 10 hours ago Flag

    Boeing is interesting. Its been announced for awhile but I haven't seen lots there yet.

    The number of huge household names trying to gain traction in this space should tell retail investors all they need to know. ABB is teaming with Samsung SDI in the microgrid space, but Bosch is there too.

    The internet comparison is perhaps a stretch, but it will change lots for sure. I'd take 1/4 of the internet impact. Just like the internet though, there will be winners and losers. I think CEO Dan has been playing his cards well and cautiously. He seems to be avoiding debt. If IPWR gets bidirectional going to 98% efficiency, things could get interesting.

  • solarfinancethinker solarfinancethinker 20 hours ago Flag

    I can assure you that they will be in microgrids. That is a given, the question is with what other alliances. SCTY and SUNE were mentioned. I know SUNE inside and out. They want bankable suppliers. I'd say that there is reasonable chance the capital raise was for that purpose. But there could be others. A SUNE alliance would be huge. I bought this guys when they were $4 and $5 by the boatload. I couldn't get others to join in. There eradication of darkness campaign will be all about microgrids. I think they and SCTY will dominate this very important market.

    I include microgrid in my calculations. It is $200M (20% of $1B) in 2018, but I believe the market will prove much, much bigger then. It will be enormous. As someone I recently ran into pointed out, this solar/storage play is the internet of today's generation. The paradigm shifts will be unimaginable as third world countries will avoid the build out of grids, among many, many other things. I believe it will be a multi-billion market by 2020, and the inverter piece will be some 15% to 20% of that.

    Again, not without risks and I've been wrong before, so do your due diligence but read everything you can on SUNE and where they are hoping to take this solar show.

  • solarfinancethinker solarfinancethinker May 23, 2015 1:04 PM Flag

    ynotcookit -- Indeed, I have spoken with Matt. I wish I was in a position to put together something for seekingalpha to clearly explain this opportunity. Sooner or later, someone will put sunlight on IPWR.

    Please note that little attention has been given to IPWR's statement that it struck dealS (plural) to demo new vertical deployment of IPWR tech. That will be done this year.

    I've been doing a bit of digging on where IPWR might next push its technology. I did not realize that the uninterruptible power (UPS) market is such a large one, and though it is not per se a green market, it does seem to have similarities between the energy storage market. At its core, UPS is driven by batteries and inverters. It is currently a $10B market, but very fractured. It is expected to hit $15 bill by 2020. I'm just guessing, but I would imagine the inverter component of the market is approximately 10% to 25%. If that is right, each 5% of market share for IPWR might represent $75M or so of revenue or more.

    From what little I've read, this seems to be a natural extension of IPWR tech into an already sizable market. I can't imagine anyone is pricing in any of the potential new verticals into the IPWR price. In fact, by my estimates, the market isn't even pricing in all the energy storage opportunities in wind and solar commercial and grid. The market forecasters tend to underestimate and really have been way off in foreseeing the rapid decline of Li battery costs.

  • solarfinancethinker solarfinancethinker May 23, 2015 9:17 AM Flag

    am4skyball -- I saw the insider add and gained some comfort myself. They no doubt have a deeper understanding of the need for capital. Because of the developers and integrators are offering long term guarantees, they need bankable suppliers. I'm hoping that the additional capital is a requirement of one of the big players like SUNE or SCTY to permit going forward with an alliance.

  • In the 4Q call, one of the analyst asked about the filing of an S-3 and a capital raise. Tim Burns responded that there was no immediate need for capital, but that it gave the flexibility to raise capital in short term if an opportunity arose outside of its strategic plan. The strong implication is that the capital raise was prompted by an as yet unannounced opportunity, or Mr. Burns wasn't being quite truthful. I'm assuming the former. Hope I am not naïve.

  • Reply to

    Interesting article by Forbes

    by geetingchris May 17, 2015 12:47 AM
    solarfinancethinker solarfinancethinker May 17, 2015 7:21 AM Flag

    Nice pick up Greetingchris....For more on that same front, do a quick search on "Weclome to the revolution of low-cost batteries and software" and also "Tesla gigafactory could be obsolete before it opens". The likes of Eos and Aquion are "targeting" as low as $100 per KwH in 3 to 5 years. Plus, there batteries have longer cycle life, meaning lower LCOE.

    There is a reason CEO Dan, in my opinion, politely said there is a lot of "noise" right now in the 1st Q call. There is a reason that SUNE, the savviest of the solar developers, has an interest in Imergy. And there is a reason someone on the 1st Q call made a point of asking whether IPWR existing solutions (including 125KwH product) could be used in Eos utility projects. (Eos is an IPWR client.)

    While a bit of an exaggeration, one of the articles I've recently read (maybe on of the ones above), referred to the upcoming battery wars as being akin to the start of the internet revolution with numerous players jockeying for a spot near the rail. It is too early to tell for sure, but I'm seeing where IPWR is a stealth horse in this race and currently closer to the front of the pack than many realize. The danger is that one of the favorite large players emerges from the pack, but right now it is difficult for a non-engineering person like myself to see that happening so readily. In short, I think IPWR is solidly in this race and hopefully it will maintain its position or build upon it with hoped for bidirectional product.

    Not without risks, but definitely lots and lots of upside here.

  • solarfinancethinker solarfinancethinker May 15, 2015 10:55 PM Flag

    Ynotcookit -- No need to apologize. I concur with all you say. I don't think the CEO will let the company get ahead of itself. His strategy seems methodical and well thought out. I don't see him taking unnecessary risks. Because of their size, I can see IPWR essentially going license only in certain potential verticals.

    I've read the 4Q transcript 4 times. By the third time, I considered it one of the best I've read. I may be reading things into where they are going that are not there. I think CEO Dan is tipping his hands, but is careful not to over promise.

  • solarfinancethinker solarfinancethinker May 15, 2015 1:56 PM Flag

    Yep -- I was well aware of this because I follow LG Chem closely. The question in the call was mine.

  • solarfinancethinker solarfinancethinker May 15, 2015 1:54 PM Flag

    Wonder who asked the question that prompted that response?

  • solarfinancethinker solarfinancethinker May 15, 2015 12:37 PM Flag

    Johnnie B -- I tend to focus closely on what I consider worst case. Given who they have signed on, I assume they can do 20% of the micro-grid and demand/peak shaving market. By my calculations at the low end of margins, that produces a nice solidly profitable company out to 2018 to 2020. I also only attach a 20 to 30PE -- which again should be quite conservative if one assumes the market will still be growing at a 30% plus rate. IPWR meets my 2X to 3X "expected" return over 3 to 5 year time frame, recognizing however that the embedded options on the other verticals far exceeds the downside exposure as I think the IP is likely worth 2X the current market cap alone.

    There are more embedded options here that you can shake a stick at. It is becoming increasingly obvious to me that IPWR is intended to accelerate pursuit of those. I'm not alone here -- as you see the $17 one year target the analysts have. That is not based on the paltry $8M revenue they project for next year.

    That being said, this stock is not without risks. What is valuable IP today may be leapfrogged tomorrow. The bidirectional is unproven. If it proves out though, the 5 year potential on this stock is quite interesting. My fear there is that it will be acquired to soon for shareholders to benefit. I was going to be quiet here and acquire for 6 months more, but I don't want an acquisition at a 50% to 75% premium. I've decided to put a bit more sunshine on what lurks here so that it is at least not acquired on the cheap.

    Caution: I've been wrong before and I will be wrong again. Folks must doo your own due diligence, read the transcripts and public documents closely. I'm just trying to give a partial roadmap.

  • solarfinancethinker solarfinancethinker May 15, 2015 12:16 PM Flag

    I concur. The 20% is IPWR number from last Q call.

  • Reply to

    Why do they have to dilute?

    by ka_dabby May 14, 2015 10:46 AM
    solarfinancethinker solarfinancethinker May 15, 2015 9:50 AM Flag

    I had assumed in my calculations that 2M shares might have to be issued. They issued 1.9M shares. Maybe I'm not off my rocker.

  • solarfinancethinker solarfinancethinker May 15, 2015 9:47 AM Flag

    Johnnie -- It goes beyond that. The market has ignored this gem. The CEO is doing a masterful job of cherry picking most advantageous markets where their overwhelming tech advantages outweigh lack of bankability. The markets they of chosen (C&I and microgrid) do not yet have entrenched leaders to overtake. Design ins are just starting, making their advantages more readily adopted. If things go modestly well, then this stock hits $20 by late 2016. If on the other hand, the bidirectional proves out and other verticals emerge, then this is off to the races.

    Please note that I have done my modelling assuming a 20%, 30% and 50% market take on JUST C&I and microgrid. Inverters tend to run 20% of cost. Market projections are available. I use those, but I'm substantially certain based on my exhaustive research and anecdotal evidence that the markets will be much above market forecasts. Like solar, folks tend to paint the storage market with a broad brush. It is true that most storage today is not economical. The key though is that there are material select markets where storage is not only economically but obscenely attractive. That will feed the beast, allowing costs to decline and open up new markets. This "could" be the emergence of another solar type lift-off, or maybe not.

  • Reply to

    Why do they have to dilute?

    by ka_dabby May 14, 2015 10:46 AM
    solarfinancethinker solarfinancethinker May 15, 2015 6:11 AM Flag

    The $20M is revenue breakeven. The analysts are low balling estimates by a lot. IPWR has said the 125Kwh product orders in second half and new customer orders will be significant, yet the analysts peg the revenue as flat throughout year. They did the same in first Q where revenues were twice what analysts pegged. Right now, if I had to guess, I'd say $5.5 to $7.5M revenues for 2015, or 4.5x to 6x 2014. The problem is it is tough to say what Gexpro will order because it hinges whether IPWR makes its way into a leading solar financier platform. However, all that will be mostly upside.

    Think of it this way - IPWR offers a transformative technology into a megatrend growth area (storage) built upon a megratrend (solar and wind). I've been wrong before, so take this with a grain of salt.

  • Reply to

    Why do they have to dilute?

    by ka_dabby May 14, 2015 10:46 AM
    solarfinancethinker solarfinancethinker May 14, 2015 7:43 PM Flag

    Gross margins are already 15% last Q. Read the transcript. Not many CEOs will be as bold to make "will statements" about regular quarter signings or working with major solar players. SPWR and Stem just hooked up and we know CEO has made Stem a priority. SUNE and SCTY are no doubt the financiers CEO Dan is referring to. SCTY was quoted as wanting integrated systems and guess what Gexpro will be offering. SUNE and SCTY are all about the microgrids and if you know anything about solar you know that that will be the next huge area for distributed generation. Add in that not many appreciate that wind micro grids will also be accelerating. Read between the lines on this: (a) IPWR cites traction as potential next area; (b) IPWR points out that LG Chem is leader in EV space and is looking for small solutions; (c) IPWR offers smaller solutions; (d) IPWR says it is looking into other verticals with LG Chem; and (e) IPWR says it has arrangements to demo non-renewable platforms. Is traction the next area? Who knows. Nothing is sure, but it is absolute that IPWR is signing some of the industry leaders and it is in discussions with the top dogs in the solar space. If the company issues 2M shares, so what. It has said it needs only $20M of business to hit cash flow breakeven. I think that happens sooner than anyone realizes. Probably 2017 or late 2017.

    Perhaps CEO Dan is pulling our leg, but I know Sharp, LG, Boeing, and Gexpro are not:)

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