WFR

[huesecon]

WFR stands out to me to be a potential investment candidate. While I start off with a fundmamental view, I use effective volume and other techniques to help pin-point entry. I'm still learning how to incorporate supply analysis, so forgive my ignoring it here.

For a few years investors had given up on the solar industry and left many of the associated stocks for dead. However, a quick look at many of the solar stocks shows recent surges in price activity. Over supply of polysilicon remains a problem, but in many places solar is now reaching grid-parity without government subsidies. And while natural gas prices in the US have made renewables less attractive, places like Japan and the Middle East are seeing a growing interest to aggresively expand in renewables (Japan has increasingly warmed to solar as result of fukushima, and Middle East already has a robust chemicals industry and is ideally suited for solar energy production). And in the United States, where subidies still exist, new laws that could potentially allow project finance companies (like WFR) to drop solar projects into REITs or MLP's could potentially change the paradigm as to how solar is funded. It would also allow existing REITS to make investments in solar energy on their exsiting property. Technological progress will make solar more and more affordable.

I should note that most of the problem assets at WFR have been taken care (the backlog is mostly US based now); most of the debt is non-recourse (tied to the projects), and they focus on small solar projects (which have better pricing). The company is hosting an analyst day on the 13th, where I expect more color on the demand picture longer-term, new financing structures, and potentially strategic alternatives to their semiconductor business.

I'm happy to share information on valuation.

What I'm particularly intrigued by is the 1.) the new uptrend in the stock 2.) in my opinion a compelling valuation 3.) Positive earnings revisions 4.) the positive divergence in Effective Volume recently on the most recent pullback and 4.) this underlying strength is leading into the analyst day on the 13th.

(I'm somewhat new to effective volume so forgive me if I'm not using the indicator appropriately. I do own the stock and look to opportunistically add to it.)

good trading,

James

17614

[Pascal]

WFR stands out to me to be a potential investment candidate. While I start off with a fundamental view, I use effective volume and other techniques to help pin-point entry. I'm still learning how to incorporate supply analysis, so forgive my ignoring it here.

For a few years investors had given up on the solar industry and left many of the associated stocks for dead. However, a quick look at many of the solar stocks shows recent surges in price activity. Over supply of polysilicon remains a problem, but in many places solar is now reaching grid-parity without government subsidies. And while natural gas prices in the US have made renewables less attractive, places like Japan and the Middle East are seeing a growing interest to aggressively expand in renewables (Japan has increasingly warmed to solar as result of fukushima, and Middle East already has a robust chemicals industry and is ideally suited for solar energy production). And in the United States, where subidies still exist, new laws that could potentially allow project finance companies (like WFR) to drop solar projects into REITs or MLP's could potentially change the paradigm as to how solar is funded. It would also allow existing REITS to make investments in solar energy on their exsiting property. Technological progress will make solar more and more affordable.

I should note that most of the problem assets at WFR have been taken care (the backlog is mostly US based now); most of the debt is non-recourse (tied to the projects), and they focus on small solar projects (which have better pricing). The company is hosting an analyst day on the 13th, where I expect more color on the demand picture longer-term, new financing structures, and potentially strategic alternatives to their semiconductor business.

I'm happy to share information on valuation.

What I'm particularly intrigued by is the 1.) the new uptrend in the stock 2.) in my opinion a compelling valuation 3.) Positive earnings revisions 4.) the positive divergence in Effective Volume recently on the most recent pullback and 4.) this underlying strength is leading into the analyst day on the 13th.

(I'm somewhat new to effective volume so forgive me if I'm not using the indicator appropriately. I do own the stock and look to opportunistically add to it.)

good trading,

James

17614

Very good analysis!

However, I do not think that the LEV accumulation is in itself related to the perspectives in the solar sector. This accumulation is indeed not confirmed by the leading manufacturers such as FSLR and SPWR, which both show negative patterns.

I suspect that the LEV accumulation on WFR is linked to the selling on the Japanese Yen, which will offer a competitive advantage to WFR.



Pascal


17617

17618

[huesecon]

Thanks for the input. These are great points. I've only done work on WFR and GTAT in the solar space (currently working on FSLR). I'll be sure to include commentary on LEV for peers in subsequent postings, as well as refer to the relevant sector MF.

best,

james