North Coast Solar Stocks

October 26, 2007

Evergreen Solar Coming Into Own

Filed under: ESLR — Tags: , , , — Jason @ 6:30 pm

Carl Gutierrez, 10.26.07, 6:30 PM ET

Investors couldn’t seem to buy enough shares of Evergreen Solar on Friday as the company reported improving quarterly results and performance, bringing needed confidence to the value of the solar company.

Share of Evergreen lifted 15.9%, or $1.47, to close Friday at $10.70. Its shares have traded in a range of $6.97 to $13.21 over the past 52 weeks.

Evergreen, based in Marlboro, Mass. , is a manufacturer of solar power products with its proprietary, low-cost String Ribbon wafer technology.

According to Pacific Growth Equities analyst Michael Horwitz, by using less silicon, the company’s novel approach to its solar technology leaves it less vulnerable to the supply problems experience by its peers over the last few years.

The third-quarter results, which were announced after the bell closed on Thursday, posted sales of $18.2 million, beating Wall Street’s expected $17.0 million. Its loss of 4 cents per share also came ahead of Wall Street’s expect 6 cents per share.

Horwitz credited the day’s rise to emboldened investor confidence.

The solar-products company narrowed its loss in the third quarter on cost-control initiatives and said it expects to narrow its loss again in the fourth quarter on continued improvements. Profits from EverQ, Evergreen’s joint venture with Renewable Energy and Q-Cells, helped boost results as well.

Evergreen and its partners will expand EverQ’s production through 2012. They are also planning an initial public offering for the joint venture, though timing and specifics remain uncertain.

The company also announced its Devens, Mass. facility was progressing faster than expected, with management contending it will be able to deliver its first shipment of solar panels by the summer of 2008, a quarter ahead of its previous estimate.

Horwitz, who reiterated his “buy” rating, was impressed with the company’s results and was upbeat on the company’s future.

In a report to investors, he said that with the new technology, expansion roadmap, and new silicon agreements, he believes the company gives investors exposure to a “best-in-class” solar player.

In terms of the company’s share price though, Horwitz noted that the stock has been lagging compared to its high flying peers fuch as First Solar and SunPower, with many investors in a short position. With the new and improving numbers, Horwitz sees a potentially strong future.

“I think the stock has a lot of legs from here,” Horwitz said.

CIBC World Markets analyst Adam Hinckley took a more pessimistic tone. According to the Associated Press, Hinckley kept his “sector perform” or “hold” rating on the company’s stock, citing low levels of profitability, until the company’s expansions–which he finds encouraging–are completed.

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October 23, 2007

Silicon Wafer Maker MEMC Shines Bright

Filed under: STP, WFR — Tags: , , , , , — Jason @ 12:01 pm

S&P is bullish on the company’s push into the rapidly growing solar power market and rates the stock a strong buy

by Jim Yin

From Standard & Poor’s Equity Research, Silicon wafer maker MEMC Electronic Materials (WFR) recently entered the solar energy industry by signing long-term contracts with two solar cell manufacturers to provide solar wafers. We believe the company’s entrance into this business complements its existing semiconductor wafer business because both types of wafers use polysilicon. By working in both industries, we think MEMC should achieve better operating margins due to economies of scale.

We believe MEMC will benefit from the rapid growth in the solar energy industry. We project this industry will grow at a compound annual growth rate (CAGR) of 30% through 2010, driven by factors such as concerns about global warming and national energy independence. These issues have caused countries to establish national programs with the goal of deriving a certain percentage of their energy usage from alternative sources of energy, including solar energy. Increased production of solar or photovoltaic cells has caused the contract price of polysilicon, the raw material used in the production of solar cells, to triple in the past three years.

We estimate MEMC’s revenue will increase 24% and 22% in 2007 and 2008, respectively. In addition to increased volume shipments, we forecast better pricing due to a continued supply shortage of polysilicon. We expect earnings to increase at a CAGR of 25% over the next three years.

Even though the stock has appreciated over 70% in the past 12 months, we believe MEMC’s enhanced growth potential is not fully reflected in the share price. We have a 5 STARS (strong buy) recommendation on the shares.

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October 19, 2007

Climate Change is Investment “Megatrend” – Deutsche

Filed under: none — Tags: , — Jason @ 5:08 pm

BEIJING – Government efforts to tackle climate change are creating a “megatrend” investment opportunity that should tempt even those skeptical about the nature and pace of global warming, Deutsche Bank analysts said on Thursday.

“The climate change markets are being created by governments through their regulation,” said Mark Fulton, the bank’s global head of strategic planning and climate change strategist.

“Whether you believe the science or not, investable markets are being created by governments, and these investable markets we think will grow significantly over the next 20 to 30 years,” he said at the launch of a report on climate change investment.

The bank has attracted around 6 billion Euros (US$8.55 billion) into climate change funds, which target firms with products that cut greenhouse gases or help people adapt to a warmer world, in sectors from agriculture to power and construction.

It is hoping to tap into a growing awareness of the cash to be made from cleaner technology — once more a preserve of idealists than hardnosed investors.

“We believe the shift away from a carbon-based economy is a megatrend that will shape the asset management industry for many years,” Kevin Parker, global head of asset management, said in a statement.

“We expect return opportunities in sectors like renewable energy, water, and agribusiness will justify dedicated strategies.”

The fund is not seeking tiny start-ups or firms with radical environmental credentials. Companies must have a market capitalization of at least 200 million Euros and a minimum 20 percent free float to be considered.

Its top ten holdings include French utility Veolia Environnement, Spanish building and construction group Acciona and diversified US manufacturer United Technologies Corp.

Around 50 percent of its investments in clean technology, some 20 percent energy efficiency and over 25 percent in firms focused on adaptation, Fulton said. He declined to comment on current or future performance.

Morgan Stanley Sees US$1 Trillion Green Mkt by 2030

Filed under: FSLR, SPWR — Tags: , , — Jason @ 5:04 pm

NEW YORK – Global sales from clean energy sources like wind, solar and geothermal power and biofuels could grow to as much as US$1 trillion a year by 2030, US bank Morgan Stanley has estimated.

Global population growth and soaring prices for fossil fuels are driving the market, along with dropping costs in clean energy and concern about energy security and climate change, the bank said in a research note issued on Wednesday.

On the market’s upside, revenues could reach US$505 billion in 2020, or nearly nine times the level in 2005, and hit US$1.02 trillion 10 years later, the bank said.

As a comparison, the gross domestic product of the the United States, the world’s largest economy, hit US$13.2 trillion last year.

“The global risks posed by climate change are driving spending and investment in clean energy solutions, which (unlike the oil shock that spawned the first wave of energy solutions in the 1970s) is durable and accelerating,” Morgan Stanley said in the note.

The bank also initiated coverage of the clean energy industry. It rated the following companies as overweight-volatile: thin film solar company First Solar Inc, solar company SunPower Corp, biofuel company VeraSun Energy Corp., and emissions reducers Fuel Tech Inc.

The report cautioned that sales could be reduced in the unlikely event that world governments change direction on climate change policy and stop taking steps to monetize greenhouse gas emissions. Peace in the Middle East could also push down oil prices, which could slow growth.

Shares in renewable energy companies also could be volatile in the short term, it said.

The bank was particularly bullish on solar power. Market penetration of solar in electricity generation could rise from levels almost too small to measure in 2005 to 11.2 percent in 2030, while wind power could go from 0.9 percent to 9.6 percent by 2030, it said.

Solar would take more market share as costs decline for things like panels that convert the sun’s rays into power. The cost of solar power should sink from US$8 per Gigawatt installed in 2005 to US$1.60 per GW by 2030. Wind power, which was US$2 per GW. would cost about the same through 2030, it said.

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