Wednesday, October 27, 2010

First Solar (Nasdaq:FSLR) An Investment, Not a Trading Stock

Communicating why it maintains a "Buy" rating on First Solar, Inc. (Nasdaq:FSLR), Auriga likes the strategy for the long term the management is enacting.

"Within our solar coverage, we continue to regard First Solar as an investment rather than a trading stock. Management has demonstrated the wherewithal to invest throughout the annual PV cycle while the project business brings stability to the business model in terms of both module placement and profitability. As the growth of the project business accelerates, the timing of revenue recognition will be difficult to model, thus investors, not traders, need to value the stock over longer investment horizons. Our profitability estimates continue to be above the Street consensus through 2011, and our initial EPS estimate on 2012 approaches $11/share," said Auriga.

Although possibly being too optimistic, Auriga sees earnings per share for 2010 having an upside, 2011 being too bearish for earnings per share, and expansion capacity driving the earnings per share to $11 in 2012.

Sounds more like a cheerleader in some ways rather than analysis.

First Solar closed at $148.15 Monday, gaining $1.00, or 0.68 percent. Auriga has a price target of $175 on them.

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