“Solar Doubler Reports Today: Buy Now”

By Travis Johnson, Stock Gumshoe, February 24, 2009

Ah, good ‘ol Louis Navellier — we can always count on a short-term promise of immense riches from his ads, and today is no different.

He actually released this email yesterday, so when I say it “reports today” that’s not technically a quote, but the company does release their earnings after the market closes today, and Louis apparently thinks you should jump in and buy shares. Of course, he thinks you need to sign up for his newsletter first … but if you just want the name of this “solar doubler,” well, you know better than that — just read on, and all will be revealed at no charge (which remains, even during these deflationary times, substantially less than the $149 the newsletter will cost you on sale).

The newsletter, by the way, is Blue Chip Growth — one of his less expensive advisories, and the one that, until recently at least, was performing best according to Hulbert. Gumshoe readers have not been all that enthusiastic about the newsletter so far, but that’s probably to be expected of a long-biased momentum investor during times like these. You can see the Blue Chip Growth reader reviews we’ve compiled so far here.

So what’s our stock today? It is a solar stock, and we’ve heard Naveller extol the virtues of some of these kinds of companies before — no surprise there, since solar was one of the real growth stock sectors in recent years. But which one does he put at the top of the list right now?

Here’s what he tells us:

“Up 50% Since November 20th

“Solar Doubler Reports Tomorrow: Buy Now

“Tomorrow, our top-rated Solar Doubler declares 4th-quarter earnings.

“Last quarter, the company reported 115% earnings growth and 119% sales growth—rising an incredible 55% in 12 weeks.

“If you can grab this one before earnings are announced, you not only could be looking at another 50% gain by May 25th but possibly a double by July 15th.”

Good stuff, eh? Of course, there are quite a few stocks that bounced mightily off of their November lows, but still, 50% is nothign to sneeze at. Nor is that kind of sales and earnings growth, if they can keep it up.

Do we get some more clues? Indeed we do!

“… analysts see the company’s revenues jumping an incredible 62% in 2009—that’s on top of last year’s huge boost of 142%. And our data confirm this.”

and

“… the company’s growth estimates continue to improve, DOUBLING from 68% for the current quarter to 145% for next quarter.”

The future picture he paints is a thing of beauty — backlog of $6 billion, major beneficiary of the alternative energy bits of the stimulus plan, big boost from the large new solar power tax credits, etc.

And then the clues keep throwing themselves on the pile, as if Navellier doesn’t even want to make the Gumshoe work for it …

This is the …

“largest manufacturer of thin-film solar but also has the lowest costs in the industry.”

“… one of the only solar manufacturers in the world with the ability to build and install utility-scale solar plants”

“…. the company landed a mammoth, utility scale 7.5-megawatt project to sell electricity to Southern California Edison under a 20-year contract along with new projects in Arizona, California and in—of all places—the Middle East.”

So we don’t even really need to remove the Thinkolator from its custom padded travel case today, I can tell you that this is …

First Solar (FSLR)

As I said, this is not the first time Navellier has jumped on board with a solar stock — he touted SunPower as the one solar stock to buy last April (it’s down substantially from that time, of course, as are all pretty much all the stocks in this sector).

And First Solar certainly is up about 50% since it bottomed under $100 in November — you can buy shares today for something like $130, and they release earnings after the bell today.

There are certainly many people who are looking for the solar winners from the stimulus bill, and from any renewed focus on alternative energy (renewed meaning, back to the good ‘ol days when oil was at $150 and you could still get a mortgage). Credit Suisse recently upgraded a couple of them, Energy Conversion Devices and SunPower, and said some things about First Solar that were both cautionary and optimistic for the future (you can see the summary here at Barrons).

There has also been a lot of debate about what the crash in polysilicon prices means to the solar companies — that’s the raw material for traditional solar cells, and it’s more efficient than FSLR’s product, but back when silicon prices were through the roof on new solar demand the cost effectiveness of First Solar’s thin film solar was a nice driver of sales — will lower polysilicon prices mean that the traditional solar panels from SunPower or Suntech take market share back? Or will FSLR continue to outperform and get big rooftop and utility projects? I have no idea, of course, just coming up with some questions for you to ask before you jump in with Navellier on this one.

First Solar is by far the biggest publicly traded solar company (market cap is four times the size of SunPower, I think, 10X as big as Suntech), and it’s also priced at a big premium to most of its large competitors — not many other firms are getting a forward PE of 18 or 19 these days, especially when most investors seem to expect that analysts are being far too optimistic with most of their earnings estimates.

There’s a good reason for that premium price, their growth has continued to be strong so far, and they’re generally a market darling, even after the fall from about $300 less than a year ago — the Price/earnings/growth ratio is down near .6, which used to scream “bargain” before the merry-go-round stopped and we were all told to get off.

But when a market darling spurns its lovers with a cruel slap in the face it can get ugly. I don’t know whether their release this afternoon will be all hugs and kisses, or if the outlook for 2009 will be a glove to the cheek or worse, but if you have followed the company at all feel free to chime in and let us know what you think.

Today’s actually a big day for earnings releases from stocks that have been heavily touted newsletter picks in the past — today we already saw Marvel with a nice earnings beat and a big share price boost this morning, earnings are also coming out from gold favorites Iam Gold and Sino Gold, and we’ll see earnings later from Ormat, Mercadolibre, Taser, St. Joe, World Wrestling Entertainment, Wynn Resorts, all good “story” stocks that can be fun to follow, and we can probably throw them in the bingo hopper and give it a couple good spins to discover which will have good earnings releases and say positive things about the year ahead.

Will First Solar be one of those that excites and delights with their earnings? Navellier thinks so, and I agree that the company has a compelling technology and an interesting opportunity, but I don’t know that I’d load up now and hold my breath to see what happens after the market close today. Unless I can do it with your money … whaddya say?

No? Well, I always say that Gumshoe readers are the wisest people on the Internet, go forth and share that wisdom — I can think of at least a few folks who could use it!

And have a lovely day.


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17 Comments on "“Solar Doubler Reports Today: Buy Now”"

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A. Nony Mouse
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A. Nony Mouse
February 24, 2009 12:13 pm

To anyone who plans to buy Sunpower, Buy the “B” shares (spwrb) they have a lower PE than the “A” shares, a lower price, and 8 votes per share. According to Sunpower spokesmen there is no logical reason they should trading at a discount to the “A” shares…except they are relatively new and not as well known or heavily traded. Other sources suggest that there is reason to believe their price per share will eventually exceed A shares. And yep I own spwrb

Farley 5
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Farley 5
February 24, 2009 1:09 pm

Barclays Capital rates this Overweight with a $140 target. ’09 earnings around $6.35. Conference call 4:30 ET 2/24 866-219-5269.

Julia
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Julia
February 24, 2009 5:30 pm

Any opinions out there for the future of CSIQ – Canadian Solar? I took a big hit on it and wonder if it has any glimmer of hope to wait for.

Brian
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Brian
February 24, 2009 5:36 pm

FLSR is getting pulverized in the after market. Anyone who bought today has a tag on their toe. Louis-what have you done??

Nick Cellino
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Nick Cellino
February 25, 2009 12:52 pm

The stock has fallen an incredible $31.00 per share in 3 hours. FSLR has to be one of Navallier’s worst picks ever.

I was taught that playing Earnings Reports on volatile stocks like FSLR is not much different than going to Las Vegas and playing roulette.

The exhilaration that occurs when a stock soars after a positive earnings report is not nearly as great as the utter anger and despair felt when a stock plummets.

Phil DeRuiter
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Phil DeRuiter
February 25, 2009 1:49 pm

I had the same experience as Nick Cellino with Navallier’s reccomendation for Apple “Sure to double” he said. It started falling the next day & fell below half what I paid. I guess you could make money off his reccomendations by shorting them?!

Lorenzo Whitney
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Lorenzo Whitney
February 25, 2009 3:39 pm

I recently joined and am wondering what you think of the Oxford club and some of it’s newsletters. I’m beginning to think they are just a front for the money in newsletter subscriptions. Or am I wrong? Lorenzo Whitney

jim
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jim
February 26, 2009 8:59 am

wow, great call, Louis — shares dropped from 135 to 108

spark
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spark
February 27, 2009 10:57 am

Since the government has forced solar companies to down the cost, their earnings have been decreased. And their cost reduction sources look limited.
Also, it seems to have the degredation issue in the cell.
I would prefer invest in low cost Si base Solar company.

KA
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March 6, 2009 7:15 am

As of yesterday March 5th FSLR is down 56.38% for BCG investors.
Of course in May 2008 issue Louis was saying “FSLR is Stock #1” and “Buy FSLR below $342”.

Now trading at $109…

gmcg
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gmcg
February 24, 2009 2:54 pm

Could you let me know the reason Sunpower has 2 trading stocks, A and B? Would appreciate it — I am waiting for a good longer-term investment in solar. I use solar for my electricity and love watching the meter run backwards!

A. Nony Mouse
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A. Nony Mouse
February 24, 2009 10:12 pm

follow this link to a Press Release that explains the B shares were formerly owned by Cypress Semi Conducter.

http://investors.sunpowercorp.com/releasedetail.cfm?ReleaseID=337605

dlc
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dlc
August 19, 2009 5:48 am

gmcg, I am looking for a way to cut my electric bill this year. Let me know how you have put in solar to cut your bills. dlc

A. Nony Mouse
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A. Nony Mouse
February 24, 2009 10:27 pm

And follow this link for a possible explanation for discrepancy in the share price.
http://cnnmoney.mobi/money/archive/archive/detail/125528/full;jsessionid=90F96408B1B2D5E1654A596E00BA5A1E

woody pang
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woody pang
February 25, 2009 2:10 pm

Will we be surprised if FSLR doubles down? That’s what happened to his last Solar Double (FSOL) from $13 down to $3 today.

Gravity Switch
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February 25, 2009 3:44 pm

I’ve heard from both fans and critics — the last time I wrote about them was for their “gas rebate check” teaser about CanRoys, and a few folks have reviewed several of their services here:

http://www.stockgumshoe.com/reviews/tag/oxford-club/

KA
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March 6, 2009 7:16 am

I forgot. Emerging Growth portfolio is now completely negative. Not a single winner in there.

See details on investorcrap.blogspot.com

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