Kaufman on Sunpower (SPWRA)
Before the closing bell yesterday, Kaufman Bros reiterated its Buyrating on Sunpower (SPWRA) despite the accounting issues weighing onthe stock. You have to admire Kaufman’s conviction when every otheranalyst immediately issued sell ratings. I think it’s too soon to bejumping in to SPWRA, but once this blows over, it could offer one heckof a long term entry point.
Here are the analyst notes courtesy of StreetInsider.com
“SunPower announces accounting irregularities in its Philippinesplant…Likely understatement of cost of goods in 2Q09 and 3Q09…Launchesinternal investigation…While clearly an issue for investors, we believethe company still…makes one of the best solar products on the market.”
“Investment Thesis: Our investment thesis is simple: SunPower has awell deserved reputation for systems design and with First Solar willlikely split up the U.S. commercial market. In the residential market,we believe SunPower could take 5x-10x the market share that First Solarmay get because it takes twice as much roof surface area of FirstSolar’s solar panels to produce the same amount of power as you canget with SunPower panels in half the space. It also has the mostefficient solar cells. Space is limited and relative to modules made byFirst Solar, the #1 U.S. solar cell producer, SunPower modules produceapproximately the same amount of energy in half the space. At themoment, SunPower modules cost more, but not much more on a totalsystems installed basis and because of raw material inputs andtechnology, the SunPower panels get less expensive every year. Allsolar cells can be made more efficient, but when you already have therecord, it is hard for anyone to catch you. Cell efficiency records area moving target. Our analysis of these data show that cell efficienciesgenerally double every 12 to 15 years.”
Shares of Sunpower (SPWRA) are holding the flat line today, butstill look poised to major support around 20 before this is all saidand done.
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