First Solar-FSLR

Laurie Frederiksen on

Those of you who are interested in solar energy may have invested in or considered First Solar (FSLR) in your investment clubs.

Trefis has recently revised their valuation estimate for the company way down, citing intense competition from Chinese manufacturers. They have done a very thorough analysis of the current state of the industry that you might be interested in reading here:

First Solar Estimate Revised

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Laurie Frederiksen
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Roy Chastain on

Laurie, thank you for the info and site. But, . . . Since FSLR has been eaten down so much, it might be an OK buy. I wonder though. Trefis states that FSLR faces "intense price competition" from Chinese companies (think "subsidized") and that FSLR lost its technological edge. Given those two statements, I'm surprised that Trefis gives it a 17.50% Upside. I caught FSLR's falling knife last year and am not too anxious to try it again. (Actually, I am very anxious about green companies. Solyndra, anyone?) I just wonder if there still isn't more room for FSLR to fall?

Roy Chastain

"Little by little, I am learning the art of being quite content with doing very little slowly."
Lionel Hardcastle in "As Time Goes By"

--- On Wed, 1/18/12, Laurie Frederiksen <laurie@bivio.biz> wrote:

Those of you who are interested in solar energy may have invested in or considered First Solar (FSLR) in your investment clubs.

Trefis has recently revised their valuation estimate for the company way down, citing intense competition from Chinese manufacturers. They have done a very thorough analysis of the current state of the industry that you might be interested in reading here:

First Solar Estimate Revised

--

Laurie Frederiksen on

On Wed, Jan 18, 2012 at 7:02 PM, Roy Chastain <e4roy@yahoo.com> wrote:

Laurie, thank you for the info and site. But, . . . Since FSLR has been eaten down so much, it might be an OK buy. I wonder though. Trefis states that FSLR faces "intense price competition" from Chinese companies (think "subsidized") and that FSLR lost its technological edge. Given those two statements, I'm surprised that Trefis gives it a 17.50% Upside. I caught FSLR's falling knife last year and am not too anxious to try it again. (Actually, I am very anxious about green companies. Solyndra, anyone?) I just wonder if there still isn't more room for FSLR to fall?

Dear Roy,

These are certainly valid questions.

That is why I like to look at the Trefis model. It breaks down the different parts of the business that are affecting the value of the stock. It also gives you the relative importance of the different parts. For example, how much of their current value comes from International sales and how much from sales in the US and Germany. For each assumption that goes into their projection, like future price per watt of the FSLR photovoltaic modules, they give you the reasoning they used to make the judgments they made. If you don't agree with their reasoning, you can modify any of their judgments using the simple graphical display and the model will adjust instantly to show you what impact that might have on the value.

I think it is very useful to go through the thought process. I find it brings me much closer to really understanding the businesses I invest in and what really is affecting the value of their stock.

--
Laurie Frederiksen
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www.bivio.com

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