“Stealth Solar: Silicon Valley’s Secret Investment.”

Streetsifter strikes again — he sent in this solution for an email that just started circulating, and he sent it in before I had even gotten around to reading the email. He even wrote it up nicely, so most of what follows is just a minor edit of his words (I agree he’s clearly got this one pegged, for what that’s worth):

If you have the spare $1,750, you can subscribe to Sara Nunnally’s Material Profits Wildcatter from Taipan New Services and receive access to her detailed report on the $2 “Stealth Solar” manufacturer of photovoltaic cells whose stock, according to Ms. Nunnally, “could gain 503.2% or more this year.” (The “.2” is a nice touch, don’t you think?)

The teaser includes Sara Nunnally’s statement that, “I can’t reveal the name of the company for fear of running up the share price” and also lists a qualification for subscribers, “You must be able to keep a secret. No blabber mouths. Sharing Material Profits Wildcatter stock picks with people who are not within our private group is strictly prohibited.” What makes that prohibition particularly amusing in the case of this specific stock is that Ms. Nunnally, herself, already “blabbed” and NAMED THE STOCK in a free 13 April 2007 promotional announcement that is still posted here on the Taipan website.

The stock is Solar EnerTech Corp. (OTCBB: SOEN), and even without the benefit of the April “blab”, the updated teaser ad is loaded with so many specific clues that the stock could be tracked down by the Gumshoe’s proverbial blind bloodhound with one nostril.

Confirmation of “new orders from Spain, Malaysia, Turkey and South Africa” is at http://www.solarenertech.com/news/release.asp?numb=227

Also, the teaser ad describes ” $7.5 million in sales from a major energy company in India. Another $8 million in revenue is in the pipeline from an agreement with a Shanghai company. And a $9.2 million sale has been made to a different company in Shanghai”. The news release area of Solar EnerTech’s website has matching information at:


And if those direct hits aren’t enough, a verbatim match of the teaser ads description of a Shanghai plant upgrade producing ” a bright, blue-green veneer across the immense surface area.” can be found here.

The ad describes Solar EnerTech as being at a discount to other solar energy producers, at a minimum an 80% discount to previous Gumshoe-solved stocks SunPower (SPWR) and Trina Solar (TSL). Whether or not that is a credible statement to justify your investing dollar is, as usual, your decision. But saving you the $1,750 subscription fee for the solution to Sara Nunnally’s teaser ad is the pleasure of the Stock Gumshoe, with the help of Irregulars like “Streetsifter”, who pretty much wrote this post.

OK, so that’s what Streetsifter says … and I couldn’t have said it better. I’ve never heard of this tiny company, and the shares don’t seem to have spiked too much on this recommendation yet, but they are up dramatically on the year.

As always, to be a killjoy I’d urge caution with microcap names in hot industries — was the company built to appeal to small time investors, or do they really have the possibility of a strong future going up against SunTech, SunPower, and the like? Suntech has recently gotten clobbered for significantly lower margins because of problems with polysilicon supply, so how does a tiny upstart like this compete in the polysilicon markets? Or do they have to? Just a couple questions to ask yourself.

A couple notes about this one, just for fun: According to Yahoo Finance, their price/sales ratio is 35,126. Yes, that’s a comma in the middle. For my international readers, it’s 35.126 — the Gumshoe even provides on the fly translation, what a guy!

So they’re not exactly booming in the sales department yet, though they do appear to have some distribution deals. They have 25MW of “capacity” and are planning to double that by the end of the year, and they are also “planning” to have their R&D partnership with Shanghai University help them develop more efficient cells. More power to them, but the reason this is a sub-$2 stock is that a lot of this is “planning” so far … though they are manufacturing and selling cells to some degree, they’ve added a second shift in the factory and made a recent shipment that was their first to Africa. I have no idea how much they need to produce to become profitable, or what their sales growth looks like, it looks like this is indeed extremely early in the life of Solar Enertech as a going concern.

And it’s probably true, as S.R. Nunnaly says, that you need to get in before they break out and/or become leading businesses if you want home run returns. Of course, the home run hitters strike out a lot, too. There are a lot of small and new solar companies out there right now, so if you have a way to differentiate them and figure out which ones are going to be winners I’m sure we’d all like to hear it.

Thanks again to another generous reader for sharing his solution with the Gumshoe and the world.

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July 2, 2007 3:35 pm