Technical Trading Overview for Evergreen Solar Inc. (ESLR)

Evergreen Solar Inc. (ESLR) develops,produces and markets proprietary solar power products. The Company’stechnology uses less polysilicon than more commonly-used manufacturingprocesses within the industry. The Company’s products are marketedunder the brand name String Ribbon (TM) for residential and commercialapplications worldwide.

Founded in 1994, the Company is headquartered in Marlboro, Massachusetts.

Share Statistics (15-Oct-2009)


FY

2007

FY

2008

%

Chg

Q2

2008

Q2

2009

%

Chg

Symbol

ESLR

Revenue, $Mn

69.9

112.0

60.2%

22.8

63.8

179.8%

Current price

$1.80

Gross Margin

24.3%

16.9%

11.2%

34.7%

1.9%

-84.8%

52wk Range:

$1.00–5.72

Oper. Margin

-36.6%

-85.8%

275.4%

-66.7%

-18.0%

-24.3%

Avg Vol (3m):

6,108,320

Net Margin

-23.8%

-75.8%

411.5%

-39.0%

-31.8%

128.1%

Market Cap.

374.94M








Dil. Shares Outst.

180.74

EPS, $

-0.175

-0.121

-30.9%

0.020

-0.104

-620%

Source: Reuters.com, SEC Filings.

Financial Summary

Financial Strength (15-Oct-2009)

Company

Industry

Sector

S&P 500

Quick Ratio (MRQ)

4.51

1.03

1.76

0.78

Current Ratio (MRQ)

5.26

1.21

2.09

0.93

Long-Term Debt to Equity(MRQ)

55.16

11.32

19.30

151.16

Total Debt to Equity (MRQ)

55.16

17.06

31.71

234.69






SALES (millions)

# of Estimate

Mean

High

Low

1 Year Ago


Quarter Ending Dec-09

19

83.07

107.40

55.64

132.06

Quarter Ending Mar-10

18

81.55

105

36.90

168.56

Year Ending Dec-09

21

275.73

307.60

238.42

416.93

Year Ending Dec-10

20

429.45

726.70

315.60

733.32

Earnings (per shares)

Quarter Ending Dec-09

21

-0.05

0.03

-0.12

0.17

Quarter Ending Mar-10

19

-0.03

0.04

-0.10

0.20

Year Ending Dec-09

19

-0.48

-0.22

-0.72

0.41

Year Ending Dec-10

21

0.01

0.35

-0.23

0.88







Source: Reuters.com

Analyst Consensus

The mean of 23 analysts polled byThomson Reuters rate shares of ESLR a “Hold.” The details of theanalysts polled are as follows:

Analyst Recommendations and Revisions

1-5 Linear Scale

Current

1 Month
Ago

2 Month
Ago

3 Month
Ago

(1) BUY

2

2

3

3

(2) OUTPERFORM

2

2

2

2

(3) HOLD

13

13

11

14

(4) UNDERPERFORM

2

2

4

4

(5) SELL

4

4

2

2

No Opinion

0

0

0

0


Mean Rating

3.17

3.17

3.00

3.00

Source: Reuters.com

Investment Highlights

Overview

ESLR develops, produces and marketsproprietary solar power products. The Company’s technology uses lesspolysilicon than more commonly-used manufacturing processes. TheCompany’s products are marketed for residential and commercialapplications worldwide.

PV Market

The market for photovoltaics (PV)reached nearly $20 billion in 2008, with estimates of a total marketsize reaching $34 billion by 2013. The rapid growth in this sectorpresents varied opportunities, as the direction of this sector isexpected to continue indefinitely at varying rates of growth.

Initially, the most likely leadingconsumer of PV technology will come from commercial and publicentities, as the economic advantages of PV is of paramount concern ofstockholders as well as state and municipal government officialsstruggling with tight and in many cases shrinking budgets.

Market growth is dependent upon PV perwatt unit costs and the price of competing energy sources. PVtechnology is very attractive as an alternative to traditionallyproduced electricity as higher oil price levels are achieved, which hasdriven a flood of new investment into PV during most of this decade.With increasing government-sanctioned programs, tax cuts, grants,better overall returns on investment capital are expected to facilitaterapid consumer acceptance and adoption of PV technology.

Fossil Fuels Prices, Industrial Production and Energy Supply Constraints Drive PV Market

The Company’s ability to grow itsbusiness track investor investment flow and the spot price of oil andnatural gas, the price, of which, exploded to $147 per barrel of oiland $13.5 per mcf (million cubic feet) of natural gas in late June of2008, then dropped to $35 per barrel and $3.50 per mcf, respectively,in December. Since December, oil recovered to $70+ per barrel, whilenatural gas is now expected to reach $5 to $6 per mcf by the end of2009.

Correlation analysis reveals as theprice of spot oil and natural gas rise, investment volume into solartechnologies and stock prices rise. Publicly traded solar companiesrallied strongly in 2008 during the strong move up in the price of oil,and conversely dropped along with the spot price of fossil fuels.

Since capital formation of the PVmarket is correlated strongly to fossil fuels prices, factors affectingoil and natural gas price are important considerations in an investmentinto any alternative fuels enterprise. Therefore, factors affecting theprices of fossil fuels play the largest role in the success ofalternative energy sources, including PV technologies.

Energy analysts cite the post-June 2008plunge and subsequent oversold condition in oil and gas prices to panicliquidation of contracts by hedge fund managers during the credit andliquidity crisis, which began in earnest in September of 2008. However,as the global economy stabilizes, the spot price of coal, oil, and itspopular substitute, natural gas, are expected to firm, said the EnergyInformation Administration (EIA).

Other private energy analysts such asMatt Simmons of Simmons & Company, and William Powers of PowersEnergy Investor hold more optimist price levels of oil and natural gasprices, both citing evidence of world peak oil production and expectedincreased demand as world GDP begins to regain its upward projection.Consumer and investor demand for alternative energy sources will risesignificantly as a result of the dis-functioning dynamics expected inthe oil and natural gas market early next year. PV will play asignificant role in the public and private shift toward alternativefuel solutions during ever decreasing inventories of oil.

Global production remains a key driverof fossil fuels prices and alternative energy investment, withproduction in both OECD and ASEAN countries weighing heavily on totalworld production outputs. Most economists expect a rebound in durablegoods production in Asia, especially China. China’s real GDP growth isexpected to reach 8.3% in 2009, officially, while GDP growth in theOECD countries is anticipated to be flat or rise slightly.

Since the demand for energy correlatesstrongly with overall economic activity, oil and natural gas prices maycontinue higher as excess inventories are depleted and diminishing newsupplies struggle to satisfy this demand sometime in 2010, according tothe Energy Information Administration (EIA). Increased investment in PVtechnologies is expected to follow GDP growth, which affect fossilfuels prices and demand for alternatives.

The U.S. Dollar and the PV Market

The nature of most transactions made inthe oil market is another bullish factor affecting investment intoalternative energy technologies such as PV. Since the majority oftransactions for oil are conducted in the U.S. dollar, the anticipatedcontinuation of the dollar’s decline will attract hedge funds andinstitutions into purchasing oil and natural gas as a currency hedge tofurther declines in the Greenback.

As the dollar reach record lows on theUSD Index, oil and natural gas prices were reaching record highs. Are-test of the lows of the U.S. dollar increases demand frominstitutional and hedge fund managers for oil and natural gas, as thesemarkets are the deepest and most liquid in the commodities space. ThePV sector will be among many beneficiaries of the bear market in U.S.dollar.

PV in the Short Term

Presently, the supply/demand fundamentals for the industry are unfavorable to producers of PV panels.

Globally, the demand for panels hasdropped significantly following the initial surge earlier in thedecade. The cost of producing electricity from PV is approximately fourtimes more than power derived from natural gas. Natural gas prices mustrise significantly from current levels to move private industry towardPV solutions. Government initiatives to deploy PV panels have supportedthe solar market through conversions and investment in utilities’increasing usage of solar power. Until renewed world GDP growth putsintense upward pressure on fossil fuels prices, meaningful demand fromthe private sector remains weak.

The supply of solar panel capacityreached 9,000 megawatts in 2008, while demand contracted toapproximately 6,100 megawatts during the same time. Industry analystsexpect this supply/demand imbalance to continue through 2012.

Company News

On September 24, the Company announcedthat Dr. J. Terry Bailey, senior vice president of marketing and saleshas taken a new position with a solar company in California. Richard M.Feldt, chairman, president and CEO has taken on the responsibilities ofBailey. Additionally, Michael El-Hillow, chief financial officer, hastaken additional responsibility for administration and operationsworldwide.

On September 23, the Company announcedthat Henry Ng has joined the Company as general manager – Asianoperations. Ng held senior positions at Asian-based companies,primarily at Sony.


eslr Technical Trading Overview for Evergreen Solar Inc. (ESLR)

Source: http://stockcharts.com/h-sc/ui?s=eslr

ESLR trades below its 13-day movingaverage. This bullish sign is significant because the moving averageare also negatively trending.

The MACD for ESLR currentlyindicates a bearish signal. The MACD is below the signal line, a 9-daymoving average of the MACD. The MACD is also below, however, thecritical level of 0, which implies the past price action had beennegative. Overall, the chart is bearish in the short term.

Comparative Analysis

Company Name

Ticker

Price per

Mrkt. Cap.

P/E

P/S

15-Oct-2009

Symbol

Share

$ Million

2009

2010

2009

2010

BP Solar International Inc.

Pvt.

Kyocera Solar Inc.

Pvt.

SANYO Semiconductor Co.

Pvt.

Divers. Electronics Median




17.56

n/a

0.99

n/a

Evergreen Solar Inc.

ESLR

1.80

379.11

n/a

n/a

2.04

n/a









Source: Thomson Financial

Insider Trading Activity

Inside Purchases – Last 6 Months

Shares

Trans

Purchase

n/a

0

Sales

14,907

5

Net Shares Purchased (Sold)

(14,907)

5

Total Insider Shares Held

8.26M

n/a

% Net Shares Purchased (Sold)

(0.2%)

n/a

Net Institutional Purchases – Last 6 Months

Shares

Net Shares Purchases (Sold)

(20,281,900)

% Changes in Institutional Shares Held

(34.6%)

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