Cowen is out with a good call on Suntech (NYSE:STP) saying that trading around 12x 2009E EPS, they believe STP shares offer 50%+ upside vs. the market in 12 months. Investors may be puzzled by the timing of the convert offering, given current market conditions and the low share price. However, this is driven by the lead time to add polysilicon capacity, and it should give STP access to long-term, low-cost supply. While the deal is slightly dilutive this year, it could be offset by higher revenue in 2009. And, details of poly supply deals should provide triggers for the shares.
STP had over $600MM in cash and investments at year-end 2007, which should support capacity expansion and working capital. However, raw material remains the key constraint to growth, and it takes 18-24 months to add polysilicon capacity. Given the opportunity to invest in very attractive supply deals, the firm believes it made the right strategic decision.
Reits Outperform.
Notablecalls: I think this is a very significant call.
This is what NCN Solar told me yesterday morning:
'..I've been quite battered in the group, just wanted to mention to you, from trading perspective, if STP can get even on day, would signal sentiment changing, and would likely mean that funds were buying here. Also FSLR first time held strong in face of rumor, may mean its got good support there..'
Pull up a chart of STP and take a look - see the bottoming action yesterday? I suspect STP is done going down. Calling it Actionable Trading Call here.
Also, check out this:
http://www.seia.org/solarnews.php?id=168
PS: HUM's a buy right here. Strong buy. The thing has been cut in half in 3 days!
STP had over $600MM in cash and investments at year-end 2007, which should support capacity expansion and working capital. However, raw material remains the key constraint to growth, and it takes 18-24 months to add polysilicon capacity. Given the opportunity to invest in very attractive supply deals, the firm believes it made the right strategic decision.
Reits Outperform.
Notablecalls: I think this is a very significant call.
This is what NCN Solar told me yesterday morning:
'..I've been quite battered in the group, just wanted to mention to you, from trading perspective, if STP can get even on day, would signal sentiment changing, and would likely mean that funds were buying here. Also FSLR first time held strong in face of rumor, may mean its got good support there..'
Pull up a chart of STP and take a look - see the bottoming action yesterday? I suspect STP is done going down. Calling it Actionable Trading Call here.
Also, check out this:
http://www.seia.org/solarnews.php?id=168
PS: HUM's a buy right here. Strong buy. The thing has been cut in half in 3 days!
2 comments:
Humana Inc. (HUM) on Wednesday nearly halved its first-quarter earnings guidance and cut its full-year earnings projection, citing higher-than-anticipated pharmacy-claims volume for stand-alone prescription-drug plans.
Are you sure about that HUM call? Earnings cut in half already. There's a good reason its down this much.
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