By William Pentland, Contributor
Swiss industrial conglomerate ABB is gambling big on the market prospects for growth in the solar energy space, agreeing to buy the U.S. solar inverter company Power-One for about $1 billion.
From: http://www.forbes.com/sites/williampentland/2013/04/22/abb-gambles-big-on-solar-power/
By Travis Hoium, The Motley Fool
Filed under: Investing
American Superconductor‘s slow and painful recovery from the Sinovel debacle took a small step forward yesterday. Management said its fiscal fourth quarter, which ended on March 31, was slightly better than expected and the stock is moving higher today.
Revenue is expected to be $19 million-$20 million, which is better than the $18 million minimum set earlier this year. That’s up from $17.4 million in the fiscal third quarter, solid progress for the company.
Maybe more important is that management expects to have cash between $49 million and $50 million at the end of the quarter, which is above a previous $48 million estimate. The real fear for investors is that the company will run out of cash because of mounting losses, so this is progress on that front.
What is less encouraging is management’s projection that it will be cash flow positive by the end of fiscal 2014, two years from now. Revenue of at least $180 million is needed to achieve that goal — the company has a long way to go to get there.
What to watch for
American Superconductor separates its business into the wind and grid categories and I’ll be watching closely how grid performed during the fourth quarter. This business grew 58% in the first three quarters; for the long term, I think it’s a better business than wind, so we need to see more progress in the fourth quarter.
The challenge is that American Superconductor is going up against fierce competition that has a better balance sheet. Power-One is one of the biggest players in the solar inverter market — it’s where AMSC would like to be — and it has the product depth and the balance sheet to hold the company off. Right now, Power-One is definitely the better investment, but if American Superconductor can survive until it reaches positive cash flow then patient investors could be rewarded.
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The article American Superconductor Takes Another Step Back From the Brink originally appeared on Fool.com.
Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of Power-One. Try any of our Foolish newsletter services <a target=_blank …read more
Source: FULL ARTICLE at DailyFinance
By Travis Hoium, The Motley Fool
Filed under: Investing
The alternative energy industry is going through a major transition, which has left a number of companies in bankruptcy. Most recently, Suntech Power, formerly the largest solar manufacturer in the world, defaulted on loans and was forced into insolvency.
Today, I will take a look at the hopes for survival of three high-profile companies in alternative energy that have many challenges ahead.
GT Advanced Technologies
A year ago, I was very bullish on the businesses GT Advanced Technologies operates in, and optimistic about the future of the company. But since then there’s been a continuation of falling prices in end markets, and equipment orders aren’t coming through as quickly as investors once hoped.
The HiCz System was supposed to change the game for solar, bringing cell efficiency from 18.5% to over 22%, a huge improvement for the industry. But its commercial launch has been pushed back to 2014 and it appears that order intake is slower than expected.
Sapphire technology started with a bang for GTAT and could be used for everything from lighting to cell phone screens, but similar cost pressures as those in the solar industry have hurt orders. During the second half of 2013 the industry is expected to pick up as new applications begin to gain market adoption.
The company fell to a $159.4 million loss in Q4 2012; with $297 million in debt versus $418 million in cash the company can’t afford to have many more quarters like that. The problem is that management expects to lose money on a GAAP basis again this year, despite a $1.2 billion backlog.
Will GTAT survive? I think so because the company has a decent balance sheet and should have long-term growth in the markets it serves. But this isn’t a bet I’d make until we see demand and cash flow pick up, something for which we’ve been waiting a long time.
Power-One
The inverter market is supposed to be hot, but Power-One can’t seem to gain any traction on the stock market. Micro-inverter competitor Enphase has actually been the hotter stock recently, while Power-One bounces around near 52-week lows.
What’s maddening for Power-One investors is that the company makes money (unlike Enphase) and has a flawless balance sheet (unlike Enphase).
PWER Net Income TTM data by YCharts
Investors are struggling with the direction of results, both on the top and bottom lines. A great balance sheet is only a strength until you start burning cash with losses, something we’ve seen before in alternative energy. If declining sales continue that’s where Power-One is headed.
In the end, Power-One is in a growing business, it’s making a profit, and it’s generating free cash flow. I’m not confident enough to say Power-One will outperform the market but I think this is one company that will survive for years to come.
First Solar
The story of First Solar over the past decade encapsulates that of …read more
Source: FULL ARTICLE at DailyFinance
By Selena Maranjian, The Motley Fool
Filed under: Investing
Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some solar-energy-related stocks to your portfolio, the Guggenheim Solar ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.
The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Guggenheim ETF‘s expense ratio — its annual fee — is 0.70%. The fund is fairly small, too, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
This ETF has performed poorly, losing to the world market over the past three years. These have been some hard years for solar companies, though, and as with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
Why solar?
Interest in alternative energies has been around for a long time, but it seems to finally be gaining some traction. The solar energy industry has taken a beating lately, though, but that just leaves some investors finding it more attractive than it was before.
Relatively few solar-energy-related companies had strong performances over the past year.
MEMC Electronic Materials , the second-largest U.S. polysilicon maker, bucked the trend, rising 12%. It recently announced plans to change its name to SunEdison, and warned of price weakness in 2013, sending its shares down sharply. The company will also focus on financing.
Power-One sank by 18%, as some see its inverters becoming commoditized, despite being quite efficient. Its net income has fallen recently, but it’s free-cash-flow positive and is expanding globally, poised to benefit as the industry heats up. It looks like a bargain to some, with improved market share, financial results, and demand.
GT Advanced Technologies plunged 63%, hurt by oversupply in the industry. Its emerging HiCz technology is promising, though, and may make solar even more efficient and cost effective. To some, the long-term prospects for GT Advanced are solid and the stock seems undervalued. Meanwhile, the company is also diversifying into sapphire technology, which might supplant Corning’s Gorilla Glass in mobile devices..
New to market is SolarCity , which had its IPO late last year. Bulls are intrigued by its disruptive possibilities, helping consumers bypass traditional utility companies with its solar offerings, and also partnering with major entities such carmakers and Wal-Mart to provide solar technology. However, it’s not profitable, and its expenses are high.
The big picture
Demand for solar energy is likely to grow. A well-chosen ETF can grant you instant diversification across any industry or group of companies — and make investing in and profiting …read more
Source: FULL ARTICLE at DailyFinance
By Brian Pacampara, Pacampara, The Motley Fool
Filed under: Investing
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool’s free investing community, power supply products manufacturer Power-One has earned a respected four-star ranking.
With that in mind, let’s take a closer look at Power-One and see what CAPS investors are saying about the stock right now.
Power-One facts
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|
|
|---|---|
|
Headquarters (founded) |
Camarillo, Calif. (1973) |
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Market Cap |
$525.0 million |
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Industry |
Electronic components |
|
Trailing-12-Month Revenue |
$1.0 billion |
|
Management |
CEO Richard Thompson (since 2008) CFO Gary Larsen (since 2010) |
|
Return on Equity (average, past 3 years) |
38.4% |
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Cash/Debt |
$265.8 million/$0 |
|
Competitors |
Delta Electronics Elec & Eltek International Emerson Electric |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 94% of the 644 members who have rated Power-One believe the stock will outperform the S&P 500 going forward.
Just last week, one of those Fools, cgtombstone, succinctly summed up the Power-One bull case for our community:
Everything in the world runs on power and the type of power is never right, you AC when you need DC, DC when you need AC, high voltage when you need low, etc. Power-One makes the most efficient power converters out there, it’s not just an “alt energy” play, they can save power on every device, every server farm, every house, (again) etc. Steep discount as people only see the solar side, nowhere to go but up.
If you want market-beating returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Power-One may not be your top choice.
We’ve found another growth play we are incredibly excited about — excited enough to dub it “The Only Stock You Need to Profit From the NEW Technology Revolution.” We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won’t be here forever, so click here to access it now.
Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.
The article Why Power-One Is Poised to Bounce Back originally appeared on Fool.com.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Emerson Electric Co., and owns shares of Power-One. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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…read more
Source: FULL ARTICLE at DailyFinance
Satcon Technology Corp., maker of a critical solar panel component called an inverter, filed for bankruptcy protection last October, but the company couldn’t find a buyer and has announced today that it will liquidate its assets. The company’s lender refused to finance the firm beyond tomorrow and Satcon’s board voted today to begin the Chapter 7 liquidation process.
Satcon, along with Enphase Energy Inc. (NASDAQ: ENPH) and Power-One Inc. (NASDAQ: PWER), made the solar inverters that converted direct current to alternating current that enabled the solar-generated electricity to be fed to the grid. Power-One’s inverters are similar to those once made by Satcom, while Enphase specializes in micro-inverters that convert the electricity at the module level instead of the installation level, making the devices cheaper, more efficient, and safer.
Power-One today announced that it had signed a deal with Panasonic to work on grid-connected energy storage systems for sale in the European and U.S. markets. Last week Enphase signed a partnership deal with Australian solar distributor RFI Solar.
The key to success in today’s solar components market is lowering costs. Cell costs have fallen through the floor, and lowering costs for inverters and mounting hardware had to continue to decline if solar installations were to remain competitive. Satcon couldn’t keep up with price cuts and that’s why the company will be in court tomorrow to seek permission for a liquidation.
Filed under: 24/7 Wall St. Wire, Alternative Energy, Bankruptcy, Green Biz, Technology Companies Tagged: ENPH, PWER
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Source: FULL ARTICLE at DailyFinance
