Long-Term Investing

FSLR and Stock Valuation

It may seem I have a vendetta against FSLR. No, I don’t, but I’m short its stock, and this is a very firm conviction short. When I read this…

Analysts sing First Solar’s praises. “People don’t fully appreciate how [it] is going to change the entire business model,” Citigroup’s Mr. Arcuri says…

Mr. Arcuri’s 12-month price target for First Solar stock is $450, while Mr. Krop’s is $360.

From Globe Investor, May 2008 (by the way they posted it up on the home page again probably due to the fact that FSLR is up so much after earnings release tonight, as in – ‘we told you so’.)

… I can’t help but think of this:

That means there’s a huge market opportunity for companies that can cut through the clutter and actually make life (and business) easier. Who’s positioned best? As we see it, four companies: Nokia (NOK: $54), Nortel Networks (NT: $77), Enron (ENE: $73), and Oracle (ORCL: $74).

Fortune, August 2000

FYI, here are live quotes for the above: [[NOK]], [[NT]], [[ENE]], [[ORCL]].

Internet companies were also to change the entire business model. And they did, but not before their stocks returned to a more sane valuation from the 1998-2000 levels.

It’s disgusting how these analysts keep pumping clearly over-valued stocks and never, not once do they mention the valuation. Yes, the company may be good and have good prospects, but is it good enough for a 23 billion$ market cap? Their sales for the year will be $1.2b. Market cap = 23 times gross sales. That’s JDSU all over again.

And I’d like to point out again, insiders sold nearly $1.5bil worth of shares (from options exercised at around $20), with annual sales being less than that.

What a joke!

If I’m missing something obvious, do let me know.