We still think it’s one of the best solar stocks around..
- Analysts, on average, expect $2.03 in profit per share for 2010 (which would give it a p/e of 12, hardly expensive)
- The last two quarters, despite rather rapidly falling pricing, TSL really surprised massively on the upside, doing 65 and 74 cents per share for Q3&4 2009 respectively (where only 38c and 60c were expected)
- Prices are actually rising: [“Collins Stewart research suggests that spot prices for solar cells have risen to $1.30-1.40/watt range from the $1.25/w level seen in January”] and, from the same article: [“Collins Stewart thinks module pricing in the second quarter will on average be $1.75/w.”], so if they can repeat the last two quarters in the first half, they would already have $1.45 of that $2.02. With rising sales and prices (and increasing efficiency leading to lower costs), that should not be too difficult..
- Keep also this in mind: [“Canadian Solar’s reliance on third-party cells is a negative for Collins Stewart, as opposed to the internal cell capacity at true vertically integrated solar companies like Trina Solar(TSL) and Yingli Green Energy(YGE).”]
- Trina does have a significant amount of debt on its books ($585M), but also a lot of available cash ($410M) and operations generate $100M in cashflow.
We have long argued that Trina Solar is one of the best solar stocks around. We still have not seen any reason to change our minds..
