Power-One, Inc. (PWER)

[eastunder]

PWER 3Q earnings 10-27-11 AMC

From prior post Link back (missed that on initial viewing)

Power-One will provide updated guidance for the full-year 2011 when it reports third quarter 2011 financial results on October 27, 2011, after the market close. Members of the public are invited to listen to the company's live quarterly conference call on the internet on Thursday, October 27, 2011 at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The conference call will feature Richard Thompson, Chief Executive Officer and Gary Larsen, Chief Financial Officer.

[stocktrader001]

up 5.30$ the pinch is wrapping up!! lol

we were here at the right time i just missed my call on it.
still moving forward. bought a other stock i am up on it.
pwer calls are up 112%. :)

gl sir.

[eastunder]

Power-One Updates Outlook for the Third Quarter of 2011

Tuesday , October 11, 2011 18:30ET


CAMARILLO, Calif., Oct. 11, 2011 (GLOBE NEWSWIRE) -- Power-One, Inc. (Nasdaq:PWER), a leading provider of renewable energy and energy-efficient power conversion and management solutions, today provided an updated outlook for its third quarter 2011 financial results. For the quarter, the company expects to report between $240 million and $245 million in revenue, which is below the previously estimated range of $265 million to $280 million.

"We are revising our guidance due to slower than anticipated demand as global macroeconomic uncertainty affected both the Power Conversion and Renewable Energy SBUs," said Richard Thompson, Chief Executive Officer of Power-One. "Power revenue was down approximately 10% sequentially, while Renewable Energy revenue was modestly lower."

"We believe that Power-One is well-positioned for the future," continued Mr. Thompson. "We are introducing new products, such as the Trio inverter for small commercial installations and the Ultra 1.4 MW inverter, which is scheduled to be shipped to beta sites this quarter, as well as diversifying geographically into new markets."

Power-One will provide updated guidance for the full-year 2011 when it reports third quarter 2011 financial results on October 27, 2011, after the market close. Members of the public are invited to listen to the company's live quarterly conference call on the internet on Thursday, October 27, 2011 at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The conference call will feature Richard Thompson, Chief Executive Officer and Gary Larsen, Chief Financial Officer.

Financial results will be released over the newswires after the market closes on Thursday, October 27, 2011. The press release will also be posted on Power-One's corporate web site. Investors who would like to listen to the live conference call may go to the investor relations section at http://investor.power-one.com/events.cfm. An online re-broadcast of the call will also be available on the site.

Power-One's Third Quarter 2011 Conference Call Info

Date: Thursday, October 27, 2011

Time: 2:00 PM Pacific Time / 5:00 PM Eastern Time;

Access: Available on the web at www.power-one.com

About Power-One

Power-One is a leading provider of renewable energy and energy-efficient power conversion and power management solutions and is the world's second largest designer and manufacturer of photovoltaic inverters. Its renewable energy products enable the industry's highest yielding conversion of power from solar arrays for use by utilities, commercial enterprises and homes. Power-One has a 40 year history as the leader in high efficiency and high density power supply products for a variety of industries including Renewable Energy, Servers Storage & Networking, Industrial and Network Power Systems. The company is headquartered in Camarillo, CA and has global sales offices, manufacturing, and R&D operations in Asia, Europe, and the Americas. Power-One is traded on NASDAQ under the ticker symbol PWER. For more information, please visit www.Power-One.com.

The Power-One, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7338

[eastunder]

RE: looks like the pinch is wrapping up

It seems to me a pinch is used more for a short term move anyway?

I tend to look out further then short term so I have yet to figure out how to use them that would actually benefit me.

If anything, when one is starting to head that direction - Down towards pinching - it keeps me from buying a stock too soon as I wait for the lines to get closer.

However - it would be nice to trade on them someday since they do seem to give a heads up on a potential ST move up?

[stocktrader001]

i added the november 5 calls on watch. they are up 50% since my add. i might switch to 4.00$ or a longer timeframe, depending on what the stock will do in the coming weeks into earnings and further. looks like the pinch is wrapping up? the green line never got to -20 but the white one was near 40 based on the chart you posted, i sticked it.

the weekly MACD could do anything, lets see what happens monday/tuesday.

have a good weekend.


stocktrader.

[eastunder]

That it's on it's way up? ;)

[stocktrader001]

what a bouce, this is why i like this stock. what does the pinch chart says? :)

have a good rest of the day.

stocktrader

[stocktrader001]

PWER Key Stats + Insider transactions:



http://finance.yahoo.com/q/ks?s=PWER+Key+Statistics



http://finance.yahoo.com/q/it?s=PWER+Insider+Transactions

[stocktrader001]

Lowest EV/EBITDA Ratio in the Electronic Components Industry Detected for Power-One (PWER, VSH, AVX)

Below are the three companies in the Electronic Components industry with the lowest enterprise value to EBITDA (EV/EBITDA) ratios. EV/EBITDA is an important metric used in valuing comparable companies. It is capital structure neutral and generally the lower the ratio, the more undervalued the company is believed to be.

Power-One (NASDAQ:PWER) is lowest with an EV/EBITDA ratio of 1.18. Power-One, Inc. designs and manufactures power conversion products primarily for the communications infrastructure market. The Company sells its products to customers in the communications, automatic test equipment, medical equipment, industrial, transportation, and other electronic equipment industries. Yesterday, Power-One traded 3.2 million shares vs. average volume of 2.5 million shares per day. The stock outperformed the Dow (3.6% to the Dow's 1.3%) and outperformed the S&P 500 (3.6% to the S&P's 0.8%) during yesterday's trading.

http://www.fnno.com/story/fast-lane/331-lowest-evebitda-ratio-electronic-components-industry-detected-power-one-pwer-vsh-avx-fast-lane

[eastunder]

I am also waiting.

Just watching right now.

[stocktrader001]

ok. today is last trading day in september. depending on how we close today, the new monthly/weekly cnadlestick will start under/above or at the moving avreges. overall i think we will break down theese in the longterm.
its not easy to predict where the bounce will come, easpecially with a stock like this. i am also not an expert.

what we know is, PWER has been a good earnings play in the past. next earnings release will be Oct. 28.
with that pinch setup and decreasing short position, i think its worth a follow in the month of october.
http://biz.yahoo.com/research/earncal/p/pwer.html

current low is 4.54$ and we are trading right at it. the monthly switch this weekend is risky imo with the weekly/monthly MACD going into the red.

this is what i see and i would not feel save to buy in over the weekend. :) i am going to wait even if i should miss a bounce. we might see this pinch set up getting tighter next week or so...lets see aswell what eod brings. yesterday there was nice buying...

gl and thank for the charts.

stocky :)

[eastunder]

Another Pinch chart:

Chart Properties also stolen off the pincher board and changed to PWER :)

[eastunder]

I don't know if there is a specific time. I bet if I put that on the pincher board they would all say it needs to get much tighter.

Here's a chart I have stolen off of the pincher board at one point in time. I use it as a master and just change the symbols to a stock I want to look at. It brings us into a better view and we can see the specific numbers involved. Currently: -10.66 on the green line and 35.60 on the white line.

From Don on the pincher board:

http://investorshub.advfn.com/boards/board.aspx?board_id=9737

"For a good pinch the ppo needs to get down around -20 with the ADX > 40."

Now with that said - the ones I tend to follow don't seem to ever get that tight? However - I think this one might certainly get tighter.

What are your thoughts?

[stocktrader001]

ohh ok. yeah i folllow pinchers. actually love pinch plays.
aswell if you look on the weekly and monthly chart were sitting on big lines.
how long does it takes for the pinch to wrap up in your opinion?

[eastunder]

PWER: Ramping up as a pincher.

Do you follow pinches? (Top 2 boxes)

[stocktrader001]

Short of float went from 46% to 36.2% as of today.

[eastunder]

Amazing, isn't it?

[stocktrader001]

lets see if we get a bounce arround 4.80$.
tuff days...

greetz

stocktrader

:)

[stocktrader001]

SMA Solar Slumps to 2-Year Low in Frankfurt After Reducing Outlook


By Stefan Nicola - Sep 19, 2011 6:11 PM GMT+0200

SMA Solar Technology AG (S92), Germany’s biggest solar-power company by market value, dropped to a two- year low in Frankfurt trading after reducing its profit forecast amid weaker-than-expected demand for rooftop systems.
SMA plunged 12 percent to 49.25 euros at 5:30 p.m. local time, the lowest closing price since Sept. 2, 2009. The company expects earnings before interest and tax of 220 million euros ($300 million) to 300 million euros in fiscal 2011, down from an earlier estimate of 315 million euros to 475 million euros.

“The demand for solar power plants has only marginally improved in many solar markets after the summer months,” Niestetal-based SMA said in a statement. “Contrary to managing- board expectations, SMA has established only a minor upturn in the high-volume business of solar inverters for roof systems.”
SMA is the biggest maker of inverters, devices that convert electricity generated in solar panels for the grid. It’s among solar companies including Bonn-based Solarworld AG to experience slumping sales in Europe, where Germany, Italy and France have cut premiums paid for power from panels over the past 12 months.
Power-One Inc. (PWER), a Camarillo, California-based peer of SMA, fell as much as 6.9 percent in New York, and traded down 4.4 percent at $6.48 as of 11:30 a.m. local time. Suntech Power Holdings Co. and LDK Solar Co., the world’s biggest solar-panel producers, each dropped as much as 10 percent.

Drag on Market

“SMA’s outlook has always been a very reliable indicator for the overall market and that’s why you see most solar companies falling today,” said Lars Dannenberg, an analyst at Berenberg Bank in London. The solar market slump may cut Germany’s installations to about 5 gigawatts this year, he said.

Bloomberg New Energy Finance, a London-based researcher, estimated in March that Germany would install at least 6 gigawatts of panels in 2011, followed by Italy with at least 4.5 gigawatts.
SMA shares have tumbled 29 percent this year, outperforming a 45 percent decline in the Global Leaders Solar Inverter Index.

On Aug. 12, SMA jumped 18 percent after posting first-half earnings that beat analyst estimates and forecasting higher demand in the second half. Today, it reported a “pleasing development” in the market for large-scale solar power plants, adding that it can’t compensate for the “weak commercial order situation.”

The company also revised its sales outlook, reducing its target to as much as 1.7 billion euros for fiscal 2011 from an earlier estimate of as much as 1.9 billion euros.

http://www.bloomberg.com/news/2011-09-19/sma-solar-shares-slump-to-two-year-low-after-lowering-outlook.html?cmpid=yhoo

[stocktrader001]

target prices as of 08.11.2011

Mean estimate : 10.34
Median estimate : 11.00
High estimate : 13.00
Low estimate : 7.00

4 weeks analysts down : 7

Estimated P/E : 8.07

[stocktrader001]

indeed, showed real strengh last friday.
are we relly trying to break above the longer term resistance line here?

we will see!

have a good day

[stocktrader001]

Post-Earnings Analysis and Short-Term Outlook

Power One, Inc (PWER) reported Q2 FY2011 results on Thursday the 28th:

* Quarterly revenue grew 21% YOY for a total $260M, squarely in the middle of the $250-270M range guided in May's Q1 conference call.
* Diluted EPS missed consensus estimates of $0.22 by 1 cent on operating income of $53M, a 23% YOY increase over last year's Q2 results of $0.17 EPS and $31M income.
* The Renewable Energy Solutions segment generated sales of $180M, which represents 27% YOY top-line growth. Power One reported significant gains in domestic markets, China and India, the cumulative total from these regions increasing from only 4% to 18% of total revenue.
* The Power Solutions segment generated sales of $80M, an 11% YOY increase in top-line growth. The company is focusing on reducing expenses and improving operating efficiencies in this segment, but the larger opportunity clearly lies with the other business group.
* The company guided Q3 revenue in the $265-280M, marginally below previous estimates. Yearly guidance was revised upward with expectations of improvement in the solar sector as a whole, stabilized demand in Europe and increasing market-share in North America and Asia.

As discussed in my previous article, PWER looked severely undervalued heading into the earnings announcement, trading at the very bottom of its historical P/E channel for a 6.3x TTM multiple. Traders appeared to have been expecting a large miss and new 52-week lows, but the company delivered well within previously provided guidance, confirmed an optimistic forecast for the rest of the year and saw an immediate uptick in interest on Friday, with the stock trading as high as $7.75, 15% above the previous close of $6.80, before settling at $7.21 by the end of the day.

Volume confirmed price action, tripling the daily average of about 2.7 million for a total of 8 million shares traded on Friday. The day also saw a huge spike in call activity, with more than 2,500 contracts for the August 20 $9 call being opened, a number well above the total amount of existing interest for the day and strike price. The September 17 $9 call saw a little over 500 contracts traded, a ten-fold increase over existing open interest.

While PWER stands to suffer disproportionately from immediate market jitters, I believe we've witnessed the bottom of a downward drift which began in mid-February, with the company's CEO, Richard Thompson, sounding a cautionary note about oversupply in the channel and weakness in Italian and German markets which used to make up an overwhelming about of Power One's sales. A number of recent developments seem to point to a turn-around in sentiment:

* Short interest has been steadily declining for the last seven months.
* The company has proven for two quarters straight that it can deliver on guidance during adverse macro conditions such as channel oversupply and sector-wide pricing weakness.
* High-profile analysts appear more willing to recognize Power One's performance during difficult conditions, with Needham's Edwin Mok commenting on Friday that "PWER lowered full year revenue guidance, but the small reduction was likely better than feared. In the near-term, business conditions remain challenging with excess channel inventory in Europe, but PWER's expansion into new markets in N.A. and Asia are driving growth." Mean analyst 12-month price target on the equity is $10.90.
* Market share gains in Asia and North America show Power One isn't just diversifying its customer base to minimize disruption from volatility in European subsidies but also looking at long-term prospects in markets with the most potential for sustained future growth.

One-year P/Sales ratio shown declining to current 0.67x multiple.

One-year P/E ratio shown declining to current 6.5x multiple.

With valuation metrics dropping in half over the span of a year as revenue and income both improved, I disagree with the brief analysis provided by Tate Dwinell published on SA, which concludes:

Technically, shares of PWER are still seeking a bottom and it’s a bit too soon to call today’s move the beginning of a new sustained move up. I’d like to see shares surge above the 50dma around the $8 level and hold there for a couple weeks, which would be a stronger signal that a bottom may be in.

This seems timid for a company showing serious growth in a worry-ridden sector. I see price action below the 50-day SMA of $7.90 as a tremendous opportunity for those looking to establish or broaden existing positions or profit from intra-day option plays.

The August 20 $7 call (PWER110820C7) for example, traded as low of $0.40 late Thursday, before the earnings announcement, and as high as $0.85 during Friday's spike. With the help of good 'til killed limit orders, one can acquire these short-term contracts at rock bottom prices and set up automatic sales when the they, along with the underlying equity, see abrupt price appreciation due to PWER's high beta.

As always, option trades with volatile equities warrant extreme caution and carry significant risk. Investors are advised to do due diligence and carry out trading strategies only after performing their own research.

Disclosure: I am long PWER.

http://seekingalpha.com/article/283569-power-one-inc-post-earnings-analysis-and-short-term-outlook

[eastunder]

Power-One: Not All Bad, but No 'All Clear'

http://www.thestreet.com/print/story/11202925.html

Eric Rosenbaum

07/28/11 - 06:16 PM EDT

NEW YORK (TheStreet) -- The solar sector has been a bloodbath in 2011, a fact that makes solar inverter company Power-One's(PWER) slight second-quarter miss seem not half bad.

Solar has been a disaster with the key European markets of Germany and Italy showing weak demand through the first half as inventory built up across the solar supply chain, including in the solar inverter space.

Power-One shares have declined 32% year-to-date amid the solar woes, and that's why the company's roughly in-line report and a full-year revenue view that surrounds the average analysts' estimate may be viewed as a positive trigger for shares.

Power-One reported earnings of $31 million, or 21 cents a share, for the three months ended June 30 with revenue coming in at $260.3 million. Wall Street was looking for a profit of 22 cents a share in the June quarter on revenue of $254 million.

The more important projection was for revenue of $1.05 billion to $1.15 billion in the full year. That forecast is below the company's previous expectations for revenue of $1.1 billion to $1.25 billion in 2011 but still has some potential upside to the current consensus view of $1.1 billion. All in all, the level of the lowered top-line view is probably less than many solar bears expected.

"They brought down the guidance, but not by a huge amount and the stock had anticipated a much worse revision," said Carter Driscoll, analyst at Capstone Investments. "They held the line on pricing and maybe incrementally took some share. You can't say there's much uptick year over year, but it wasn't the Armageddon some people were expecting."

If the Power-One report wasn't all bad, it was also far from an 'all clear' signal. Pricing remains under pressure throughout the solar supply chain and even if Power-One started from a lower price point than some competitors -- a point it has never failed to make in the past -- investor sentiment will still turn on profitability, not just revenue holding up better than expected. The revenue guidance doesn't provide investors with any indication of earnings power reduced by pricing declines.

Recent guidance revisions from solar modules companies SunPower(SPWRA) and Canadian Solar(CSIQ) provided a window onto reduced earnings power.

SunPower pre-announced that it would meet revenue guidance but illustrated the weakness in gross margins by swinging from a potential profit to a guaranteed loss. Canadian Solar said it would make its shipment guidance, but guided its gross margins down to a range of 12% to 13%.

Inverter companies maintain that they are insulated from declines in solar module pricing, and Power-One says competitors in the inverter space have been playing catch-up to its pricing. Yet this may not lead to a big relief rally in shares if Power-One suggests that pricing declines in the second half of the year will reduce earnings.

"The relief rally could be wiped out by module commentary," Driscoll said. "If the market is down 15%, inverter pricing may not be down as much, but it will be down in a relative band."

Power-One shares were flat at $6.88 in after-hours action on Thursday with more than 100,000 shares changing hands, according to Nasdaq.com. The stock ranged as high as $7.35 earlier in the extended session and as low as $6.70.

Power-One CEO Richard Thompson is expecting an upturn in Europe before the year's end.

"Power-One has made significant progress expanding into the fast growing solar markets in the United States, China and India, resulting in important customer wins and increased market share," Thompson said in Thursday's press release. "For the second half of 2011, we anticipate the solar market will begin to gain momentum in Europe and be bolstered by gains in new geographies."

-- Written by Eric Rosenbaum from New York.

[eastunder]

PWER: Finviz:

Very nice move


http://finviz.com/quote.ashx?t=pwer&ty=c&ta=1&p=d

[stocktrader001]

yeah we got our eanings ride up. congrats to all and have a good weekend.

12%+ 7.70$

[eastunder]

Power-One Announces Second Quarter 2011 Results

Thursday , July 28, 2011 16:05ET


-- Quarterly revenue grows 21 percent year-over-year to $260 million
-- Second quarter diluted EPS reaches $0.21 on operating income of $53
million
-- Customer wins and share gains in the United States, China and India spur
renewable energy sales


CAMARILLO, Calif., July 28, 2011 (GLOBE NEWSWIRE) -- Power-One, Inc. (Nasdaq:PWER), a leading provider of renewable energy and energy-efficient power conversion and power management solutions, today announced financial results for the second quarter 2011. For the quarter ended July 3, 2011, Power-One recorded net sales of $260 million, an increase of 21 percent from the second quarter 2010. Net income attributable to common stockholders for the second quarter was $31 million, or $0.21 per diluted share, compared to $24 million, or $0.17 per share for the same period last year.

"Power-One has made significant progress expanding into the fast growing solar markets in the United States, China and India, resulting in important customer wins and increased market share," said Richard Thompson, Chief Executive Officer of Power-One. "Power-One continued to perform well in an uncertain marketplace, highlighting the strength of our products and global business model."

"For the second half of 2011, we anticipate the solar market will begin to gain momentum in Europe and be bolstered by gains in new geographies, while the Power Solutions business continues to show improvements," continued Mr. Thompson.

Renewable Energy Solutions

During the second quarter of 2011, Renewable Energy Solutions posted a 27 percent revenue increase versus the same period last year, as Power-One showed continued momentum in the photovoltaic (PV) inverter market. The Company gained new customers in the United States, China and India which contributed to the increase in Renewable Energy revenue in North American and Asia Pacific, as these regions increased from 4% of total revenue last quarter to 18% in the second quarter of 2011.

Inverter and related products generated sales of $180 million for the second quarter 2011. During the quarter, Power-One shipped 718 MW of inverters, bringing the 2011 year-to-date total to 1.3 gigawatts, versus 800 megawatts during the same period in 2010.

Power Solutions

Power Solutions increased sales by 11 percent year-over-year, with revenue of $80 million in the second quarter 2011 versus $72 million in the same period of 2010. During the second quarter, Power Solutions' profitable performance was driven by continued operating efficiencies, including better absorption and reduced delinquencies. The unit continues to focus on reducing operating expenses and will continue to develop and implement plans to achieve its objectives.

Business Outlook

Power-One continues to expand its reach into new customers and geographies. For the third quarter of 2011, Power-One forecasts revenue of $265 million to $280 million, indicating increasing revenue versus the second quarter of 2011. Third quarter revenue is expected to be positively impacted by increased Renewable Energy sales to regions such as North America and Asia, as well as a stabilizing to improving market in the European region. For the year, Power-One anticipates generating revenue between $1.05 billion and $1.15 billion.


Continued at:

http://www.knobias.com/story.htm?eid=3.1.c9bea607628ee856caf273e4f6897c17d18152fcd66901ce0efb73bb49989e1c

[eastunder]

PWER: Q2 EPS 21c vs 17c Misses 22c Est; Guidance In-Line with Consensus

Thursday , July 28, 2011 17:02ET

QUARTER RESULTS
Power-One Inc (PWER) reported Q2 results ended June 2011. Q2 Revenues were $260.30M; +21.32% vs yr-ago; BEATING revenue consensus by +2.53%. Q2 EPS was 21c; +23.53% vs yr-ago; MISSING earnings consensus by -4.55%.

Q2 RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Revenues:       $260.30M      $214.55M     +21.32%      $253.88M      +2.53% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 EPS:                 21c           17c     +23.53%           22c      -4.55% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 

GUIDANCE

Q3-11 Revenue Outlook [$265 - $280M]: PWER expects Q3 2011 revenues of $265 to $280 million. The Q3-11 revenue forecast is in-line with current consensus estimates.

FY-11 Revenue Outlook [$1050 - $1150M]: PWER expects FY 2011 revenues of $1.05 to $1.15 billion. The FY-11 revenue forecast is in-line with current consensus estimates.

[ElvisM]

Thank you very much, stockfreak001. I'm in!!!!! I want to see the results tomorrow!

[stocktrader001]

Power One Severely Undervalued Heading Into Thursday's Earnings

In a previous article, I provided a company profile for Power One, Inc (PWER) and presented an investment thesis which outlined the possibility for significant near-term price-appreciation, with its July 28th Q2 results as potential rebound catalyst. In anticipation of the earnings announcement later this week, here's an update to PWER's outlook:

SatCon's (SATC) disappointing earnings announcement and lackluster guidance for Q2 pummeled the entire sector, dragging PWER down about 6% on July 5th. SatCon reported weaker demand in European markets, especially Germany and Italy, after governments changed policies that offered incentives for solar technology. The day served as reminder that players in the solar arena and derivatives remain highly volatile. Power One is no exception with a beta of 2.17, and is currently trading at the bottom of its historical P/E channel, around 6.6x TTM on a range of 6.4 to 11.6.

Information sourced from the most recent S&P Compustat Company Report.

On a constructive note, however, the Federal Energy Regulatory Comission recently released a final version of guidance originally inked about to a year ago on how public utilities must approach and pay for grid upgrades. These rules and regulations eliminate uncertainty around grid improvements and may represent the beginning of a secular growth cycle in the industry. As a whole the domestic industry is shifting towards a smarter grid which better incorporates renewable energy. Transmission, construction and component suppliers all stand to benefit.

Power One provided $250 to $270M revenue guidance for Q2, with CEO Richard Thompson noting the company is specifically looking at geographic diversification, especially expansion in North America. He sounded cautiously optimistic on the previous earnings call:

Further, we expect our focus on new geographies, particularly North America and Asia, will add revenue in renewables and lead to improving profitability in both our Power Solutions and Renewable Energy Solutions SBUs.

Technicals remain very weak, with PWER trading significantly below 200 and 50-day SMAs of $9.10 and $8.04 respectively. Sentiment indicators point to the equity being oversold while the MACD has been wavering inconclusively for the last two months.

Nonetheless, PWER has shown declining short interest over the last few months, a very positive sign indicating that traders recognize the stock is undervalued and there's more risk to short rather than long positions:

Settlement Date Short Interest % Change Average Daily Volume Days to Cover
06.30.2011 24,226,979 -17.07% 2,034,399 11.91
06.15.2011 29,213,425 -2.88% 2,120,495 13.78
05.31.2011 30,080,046 0.68 2,948,611 10.20
05.13.2011 29.878,193 -10.75% 4,650,2050 6.43
04.29.2011 33,475,105 -4.73% 3,353,438 9.98
04.15.2001 35,005,426 1.43 4,065,428 8.61
03.31.2001 34,513,596 -9.29% 4,123,537 8.37
Data courtesy of nasdaq.com


In anticipation of Thursday's earnings release, Power One looks severely undervalued, and its high beta makes it a great candidate for income-seeking investors looking to either establish long positions at a discount or profit from the volatility.

Those who want to position themselves for an immediate rebound should look at purchasing August 20th $7 calls currently trading around $0.50. This implies a break-even price of $7.50, a rather conservative target below 50 and 200-day SMAs. Barring a large quarterly miss or sustained macro uncertainty on debt worries, this appears to be an appealing opportunity to establish long positions.

October 22nd $8 puts sell for $1.35 per contract, returning an annualized 72% (for comparison purposes only). This implies a break-even price of $6.65, below the stock's 52-week low.

As always, high volatility stocks involve risk as well as the potential for significant reward.

Disclosure: I am long PWER.

http://seekingalpha.com/article/281684-power-one-severely-undervalued-heading-into-thursday-s-earnings

[stocktrader001]

PWER Second Quarter 2011 Earnings Release, Thursday July 28 after market close.
http://bit.ly/r2LFBS

to join the conference call go here:

http://investor.power-one.com/events.cfm

[eastunder]

Power One Is a Solar Play That's Poised to Pop

by: Harm Diaconescu July 4, 2011


http://seekingalpha.com/article/277811-power-one-is-a-solar-play-that-s-poised-to-pop?source=yahoo

After suffering a severe beat-down earlier in the year and sideways action through spring and early summer, Power-One Inc. (PWER) looks like a solar sector play with potential for rapid price appreciation and sustainable long-term growth prospects.

The company is the second-largest designer and manufacturer of photovoltaic inverters in the world. It operates two units:

The solar-oriented Renewable Energy Solutions division provides products which convert, regulate, purify, store and manage renewable electrical power. Energy inverters harvest solar or wind energy and convert the DC power from solar panels or variable AC from wind turbines into conditioned AC energy for transportation through transmission lines. According to S&P analysts, renewable energy is outpacing the rest of the power industry, with a mean estimate of 20% CAGR through 2014.

The Power Solutions division provides AC/DC and DC/DC converters and network power systems for data center applications including data storage, servers and optical networking. While consumers and large companies look to move to the cloud and data centers expand, this market (which includes networking, telecom and computer/office equipment) is expected to see continued growth at a pace of 5-7% CAGR, according to IMS Research.

Long-term, the U.S. Department of Energy believes that global power needs are set to double by 2025, and a significant amount of this additional power capacity is likely to come from renewable sources. Power-One appears poised to capitalize both from the expanding need in renewable energy management well as continued growth from enterprise-level initiatives in power management, conservation and efficiency.

This information was sourced from an S&P Compustat company report, and Power-One Inc. FY2011Q1 results.

Fundamentals:

Power-One is trading at 7.3x P/E TTM, in the low end of its historical P/E range of 5.8 to 11.6x. Forward P/E looks even better around 7.1x.

PEG sits at an impressive 0.43 vs. an industry average of 2.68. The company is in the top quintile of the industry for growth prospects, since it looks ready to capitalize on strategic opportunities in renewable energy and enterprise power efficiency.

P/FCF TTM [trailing twelve month] sits at a solid 5.9, below sector and industry averages.

P/Sales TTM sits at 1, in line with sector and industry averages.

Power-One has about $240M in cash and $36M in debt, which works to a $3.16 book value per share. It has a large short interest ratio of 11.60%, a 90% rate of institutional ownership and does not pay a dividend.

This information was sourced from the S&P Compustat company report, Fidelity Investments, and Yahoo! Finance.

Technicals: PWER is trading around $8.20, significantly below the 200-day SMA of $9.22 but in the neighborhood of 50-day SMA of $8.20. The 52-week range is $6.54 - $13.04. The company announced potential issues with inventory build-up in the channel at the end of FY2010 in early February and was punished with a severe sell-off. On worries of weakness in the Italian and German solar markets, the equity has zig-zagged in a well-defined range, between $7.50 and $9.



MACD confirms the flattening, leveling off after dipping severely after the February sag. It currently sits at -0.05 with a negligible 0.01 positive divergence from the EMA line. RSI confirms the equity to be channel-bound, without major signs of being overbought or sold. Volume has been light for the last two months.

Sentiment: Analysts are bullish on the stock, with Piper Jaffray, Thomas White International and EVA Dimensions all recently upgrading PWER shares to buy. The 12-month mean estimate among the 12 analysts actively covering is $11.40, indicating a significant upside potential of about 40%.

Two facts of particular interest:

There is a relatively high percent of institutional ownership for a midcap, 90%. This may lead to upward price pressure in the near-term, since it's unlikely for these large players to unload shares in significant volume.

The 11.6 short interest, combined with high insitutional ownership, may lead to a significant squeeze, adding to positive momentum.

This information is sourced from Fidelity Investments.

Power-One had a tough year so far. Most of the weakness was prompted by concerns around dwindling subsidies to solar industries in Italy and Germany and oversupply in the channel, leading to a large drop in demand. Both of these major challenges appear to have been largely set to rest by the company's first quarter performance, a $.20 EPS vs. a mean analyst estimate of $.21. Traders were expecting a large miss and downward revisions to yearly targets, but neither took place.

In a February interview with Jim Cramer's TheStreet.com, Power-One's CEO refused to provide margin guidance for the year but did specify that the company's valuation appears out of whack considering its recent track record.

I believe we are undervalued, and I remain surprised at that, with our great performance and how well we managed the growth. I recognize that we are newly profitable and the company has been a restructuring story for years, but in a few short years we invested in the right product line and took costs to the right level and carefully adjusted operating expenses and are building out our business, so I feel confident in the team here. To some extent, the marketplace we have to survive in is dictated to us, and we believe we can do better than the competition

Nine dollars a share doesn't? make a lot of sense to me. I understand investors were disappointed and we are the first to publish earnings in the sector, but look at how we trade relative to EBITDA. We are consistently profitable and just don't deserve this low multiple. On the other hand, I understand what investors are looking for, and we have to prove that we can be successful in North America, and at the time, there is stiffer competition and big cap companies coming into the inverter space, almost on a weekly basis, so we will see where it all leads.

It's fair to call this assessment sober, and the fear baked into Power-One as of now does not appear warranted. John Rosenberg wrote a compelling SA article earlier in the year, describing a tadrastic short squeeze in the making. He has been proven right, with the equity finding a solid floor around the $7.50 mark. With the upcoming August 5th earnings release and momentum building in broader indexes, Power-One looks ready to pop.

For those interested in going long, here are a couple of option plays worth considering:

Purchasing August 20th $8 calls for a $.67 premium per share implies a break-even price of $8.87, an 8% upswing from current price levels. That appears to be an entirely realistic target price post quarterly results.

Selling August 20th $9 puts for a $1.26 premium per share implies a break-even price of $7.74, returning an annualized rate of 112% (for comparison purposes only.) Even if the puts are exercised, purchasing a growing company at the bottom of its recent price channel does not appear to be a losing proposition.

Disclosure: I am long PWER.

[eastunder]

PWER:

http://www.stockta.com/cgi-bin/analysis.pl?symb=PWER&num1=3&cobrand=&mode=stock

Support/Resistance

Type Value Conf.  
 resist. 11.81 2  
 resist. 11.49 3  
 resist. 9.29 3  
 resist. 8.93 9  
 resist. 8.58 6  
 resist. 8.10 19  
 supp.   7.71 2  
 supp.   7.25 4 

PWER 6/26/11 $7.80

[stocktrader001]

PWER: Open Gap

Direction Date range

down Feb-04-2011 11.46 to 9.35

[eastunder]

Power-One, Inc. Announces Digital Power Management Patent License With ZMDI

Tuesday , June 14, 2011 08:00ET


CAMARILLO, Calif. and DRESDEN, Germany, June 14, 2011 (GLOBE NEWSWIRE) -- Power-One, Inc. (Nasdaq:PWER), a leading global manufacturer of renewable energy and energy-efficient power conversion and management solutions, and Zentrum Mikroelektronik Dresden AG (ZMDI), an innovative provider of energy efficient analog and mixed-signal semiconductor solutions, announced today that they entered into a non-exclusive, worldwide, Field of Use agreement for Digital Power Technology (DPT) patents from Power-One.

Digital Power Technology drives increased system efficiency, improved design flexibility, faster time to market, decreased footprint size and lower system costs. DPT also enables telemetry capability, providing access to critical information including current, temperature and voltage. Telemetry allows the system to accurately monitor its power consumption and thermal performance, enabling designers to easily engineer key features such as system optimization, fault detection and predictive maintenance features into their end products.

As applications in server, storage, networking and wireless infrastructure continue to drive board densities higher, requiring complex power architectures to drive FPGAs, ASICS, DSPs and other semiconductor devices, Digital Power Technology is an extremely attractive solution.

"Power-One is pleased to license its Digital Power Technology to ZMDI, an emerging market leader in the power-management IC industry, for incorporation into its products," said Steve Hogge, President of Power Solutions at Power-One. "With the expanding number of leading power supply and semiconductor companies partnering with Power-One, we will continue to expand the market by providing energy-efficient technologies with increased functionality for our customers."

"Leveraging the DPT patents meshes with our goal of delivering energy-efficient solutions for point-of-load applications," stated Bernhard Huber, ZMDI Business-Line Manager for Standard Components. "We can focus on developing chipsets that address all output loading conditions based on ZMDI's performance goals."

[shankapotamus]

PWER update: http://blog.chartmystock.com/

[stocktrader001]

15 Profitable Stocks With Significant Decreases in Short Selling

1. Power-One Inc. (PWER): Diversified Electronics Industry. Market cap of $881.89M. Free OCF/Revenue-TTM at 14.62% up from its Free OCF/Revenue-3 Year Average of 8.54%. Shares shorted dropped from 33.48M last month to 29.88M this month. This represents a 3.68% change in the company's 97.70M share float. The stock is a short squeeze candidate, with a short float at 30.41% (equivalent to 7.56 days of average volume). The stock has gained 26.83% over the last year.

http://seekingalpha.com/article/274154-15-profitable-stocks-with-significant-decreases-in-short-selling?source=yahoo

[stocktrader001]

SMA Solar, the world's largest maker of solar inverters, is gearing up for a tough defense of its 20 percent-plus profit margins and leading market share as competition intensifies in the lucrative sector.

"We are looking very, very closely at our competition and don't get me wrong -- we're fighting for our customers every day," incoming Chief Executive Pierre-Pascal Urbon told the company's annual shareholders' meeting on Thursday.

The company is coming under attack from new players such as Power One Inc, whose market share soared last year to make it the global No.2 and which reported sharply higher quarterly earnings earlier in May.

Urbon, who also retains his chief financial officer post, said the company's margin would retreat in the mid-term from last year's near-30 percent on the basis of earnings before interest and tax (EBIT) as competitive threats increase.

Unlike module and cell makers such as Q-Cells and Solon which suffered from weak demand ahead of solar power subsidy cuts, SMA Solar remained profitable in the first quarter.

But its EBIT margin fell to 5.4 percent in the period from the 27.4 percent reached last year, after clients' high inventories eroded profitability.

The company, however, kept its outlook for an EBIT margin of 21-25 percent in 2011, compared with a Thomson Reuters I/B/E/S estimate of 22 percent.

SMA said demand for its products would pick up from the second quarter onwards, counting on markets outside Germany, the world's biggest solar market and where state support is set to be cut.

"We see enormous potential in foreign markets, particularly Asia and North America," outgoing Chief Executive Guenther Cramer said. SMA made 45 percent of 2010 sales outside Germany.

Solar inverters convert electricity generated from solar modules into a form which can be fed into an electricity grid.

SMA Solar also plans to invest between 100 million euros ($139.7 million) and 130 million a year in 2011 and 2012, according to a presentation at its shareholder meeting.

The company -- whose shares were down 0.2 percent at 7:07 a.m. EDT -- competes with smaller German players Fronius and Kaco, but also with conglomerates such as Siemens and Schneider Electric in the field of solar inverters.

(Editing by Hans Peters and David Holmes)

http://www.reuters.com/article/2011/05/26/us-smasolar-idUSTRE74P38020110526?feedType=RSS&feedName=GCA-GreenBusiness&rpc=43

[stocktrader001]

3 Great Stocks That Are Still Cheap

Value investing, the art and science of buying stocks at a discount to their intrinsic value, is a great way to approach the market at times when it's looking a bit overheated (like right now). As legions of great value investors from Warren Buffett on down have proven over the years, there's nearly always value to be found in the market, even when all of the big names look overpriced.

An effective quick screen for value
But how do we find it? One of my favorite ways to find value stocks involves the screen advocated by hedge fund manager Joel Greenblatt in his (excellent) The Little Book That Beats the Market. Greenblatt's idea was to boil the stock selection process down to simple metrics that answer two big questions:

Is the stock cheap? Greenblatt screens for earnings yield, which is essentially a more sophisticated version of the price-to-earnings ratio favored by old-school value investors. Greenblatt's favored calculation of earnings yield is a little complicated, but the simpler method that most stock screeners use -- earnings per share divided by stock price -- will get us in the ballpark. Greenblatt looks for stocks yielding more than 10%.
Is the business a good one? As we all know, sometimes cheap stocks are no value -- they're cheap for a reason! Greenblatt screens for healthy businesses by looking at return on assets (ROA), the company's after-tax profit divided by the value of its assets (factories, inventory, etc.). Generally speaking, a high ROA is a sign of a well-run business. Greenblatt looks for an ROA of 25% or more.
It's a simple screen, but like most screens, it's not foolproof. Greenblatt deals with that by recommending a systematic investment approach -- run the screen once a year, invest in several of the recommended stocks, sell the following year, and repeat. Personally, I don't do that. (You can if you like; it works pretty well if you follow it strictly and give it time. Read the book to learn more.)

Instead, I run the screen, then take a closer look at the most promising companies that show up. And that's exactly what I did when I was looking for stocks to buy recently.

Three intriguing stocks...
Here are a few of the names that turned up on my screen:

Cirrus Logic (Nasdaq: CRUS ) . This integrated-circuit developer sports an earnings yield of more than 17% and an ROA of almost 54% ... and fortunes that are tied closely to none other than mighty Apple (Nasdaq: AAPL ) , which includes a Cirrus audio chip in its iMac product line. Cirrus has been a highflier, but the company's stock price took a whack in April after a quality issue (since resolved) led to missed earnings. That has the makings of a perfect value situation, and I think this one's worth a much closer look.

Power-One (Nasdaq: PWER ) makes power inverters for wind and solar energy companies, and has been gaining market share in this intriguing corner of the alt-energy space. An earnings yield of almost 14% suggests that it's still reasonably priced, and an ROA around 26% suggests solid management. Fool Jim Mueller took a close look recently and ended up adding it to his Rising Star Portfolio. Take a few minutes to learn more about this one.

Momenta Pharmaceuticals (Nasdaq: MNTA ) . Full disclosure up front: I ended up buying this one myself last week. At first glance, generic-drug maker Momenta looks like a wannabe in a space dominated by big names. But unlike most low-margin generic drugmakers, Momenta has the scientific capabilities to make generic versions of highly complicated drugs, like its copy of Sanofi's (NYSE: SNY ) blockbuster anticoagulant drug Lovenox. While there's a risk that other makers could step up and compete in its space, it's a formidable player, with a big cash hoard, no debt, a good pipeline, and savvy management. (Its ROA is almost 61%.) And it's fairly cheap, with an earnings yield around 11.6%. Take some time to learn about this one before buying, since it's something of a special situation -- but still, I like the odds.

...and a useful lesson
Of course, as we all know, sometimes "value" stocks are cheap for a reason. With an earnings yield greater than 14%, and an ROA of almost 30%, Blackberry maker Research In Motion (Nasdaq: RIMM ) would seem to be a prime buy candidate ... until you look a little further. For me, this is a prime example of "cheap for a reason," a company with management issues and a stagnant product line that has been leapfrogged by competitors. It's one "value" that I plan on avoiding.

http://www.fool.com/investing/value/2011/05/27/3-great-stocks-that-are-still-cheap.aspx

[shankapotamus]

PWER blog entry: http://blog.chartmystock.com

[stocktrader001]

Is Power-One Working Hard Enough for You?

By Seth Jayson | More Articles
May 16, 2011 | Comments (0)

Margins matter. The more Power-One (Nasdaq: PWER ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why I check on my holdings' margins at least once a quarter. I'm looking for the absolute numbers, comparisons to sector peers and competitors, and any trend that may tell me how strong Power-One's competitive position could be.

Here's the current margin snapshot for Power-One and some of its sector and industry peers and direct competitors.

(view link bellow for graphic)

Unfortunately, that table doesn't tell us much about where Power-One has been, or where it's going. A company with rising gross and operating margins often fuels its growth by increasing demand for its products. If it sells more units while keeping costs in check, its profitability increases. Conversely, a company with gross margins that inch downward over time is often losing out to competition, and possibly engaging in a race to the bottom on prices. If it can't make up for this problem by cutting costs -- and most companies can't -- then both the business and its shares face a decidedly bleak outlook.

Of course, over the short term, the kind of economic shocks we recently experienced can drastically affect a company's profitability. That's why I like to look at five fiscal years' worth of margins, along with the results for the trailing 12 months (TTM), the last fiscal year, and last fiscal quarter (LFQ). You can't always reach a hard conclusion about your company's health, but you can better understand what to expect, and what to watch.

Here's the margin picture for Power-One over the past few years.



Because of seasonality in some businesses, the numbers for the last period on the right -- the TTM figures -- aren't always comparable to the FY results preceding them. To compare quarterly margins to their prior-year levels, consult this chart.


Source: Capital IQ, a division of Standard & Poor's. Dollar amounts in millions. FQ = fiscal quarter.

Here's how the stats break down:

Over the past five years, gross margin peaked at 38.8% and averaged 26.1%. Operating margin peaked at 28.1% and averaged 3.9%. Net margin peaked at 14.1% and averaged -3%.
TTM gross margin is 39.1%, 1,300 basis points better than the five-year average. TTM operating margin is 28.4%, 2,450 basis points better than the five-year average. TTM net margin is 15.3%, 1,830 basis points better than the five-year average.
With recent TTM operating margins exceeding historical averages, Power-One looks like it is doing fine.

If you take the time to read past the headlines and crack a filing now and then, you're probably ahead of 95% of the market's individual investors. To stay ahead, learn more about how I use analysis like this to help me uncover the best returns in the stock market. Got an opinion on the margins at Power-One? Let us know in the comments below.

http://www.fool.com/investing/general/2011/05/16/is-power-one-working-hard-enough-for-you.aspx

[stocktrader001]

Power One CEO sees Italian solar investments return

New YORK | Tue May 17, 2011 5:51pm EDT
May 17 (Reuters) - Funding for new Italian solar projects should begin to flow in the coming weeks as investors digest new subsidy rules there, the head of solar power equipment maker Power One (PWER.O) said on Tuesday.

After months of negotiating, the Italian government agreed to caps on lucrative subsidies that had made the country the world's No. 2 solar market. [ID:nNLDE7440Z]

"What we're waiting on now, after the announcement, is the financing spigot to be turned on again and to start funding our customers. We think that's still a matter of weeks," Power One Chief Executive and President Richard Thompson told Reuters in an interview.

Power One, based in Camarillo, California, is the second largest supplier of inverters to the solar power industry behind Germany's SMA Solar (S92G.DE).

Even with the reductions to the Italian solar subsidies, returns on investment there for solar power developers remain between about 8 to 10 percent, he said.

About 96 percent of Power One's renewable energy business is generated in Europe, although it is moving to increase sales in Asia and North America.

Shares in Power One slipped 0.1 percent to $8.79 on Nasdaq, bringing its year-to-date loss to nearly 14 percent.

(Reporting by Matt Daily; Editing by Richard Chang)

http://www.reuters.com/article/2011/05/17/powerone-idUSN1720769220110517?feedType=RSS&feedName=rbssEnergyNews&rpc=43

[stocktrader001]

PWER Target Prices as of 05.07.2011

Mean estimate : 11.89
Median estimate : 11.50
High estimate : 18.00
Low estimate : 8.00

Estimated P/E : 8.62

Total analysts: 17
Average consensus: 1.82 (Outperform)

1. Buy : 8 47.06 %
2. Outperform : 4 23.53 %
3. Hold : 5 29.41 %

[stocktrader001]

thanks for this article. it explains it. italy growth for solars is slowing down, the market there sounds like its satiesfied. they say the would focus more on german markets.
what i am missing is the outlook for the US market? Watching America investing more in Solar energy the next years will be a good thing. The market is big an with pwer at the lead for inverters +, we could get good piece of the cake here.

[stocktrader001]

looks good! nice push higher on good volume so far. first price target 9.25$ imo. next week should be great here. yahoo!

[eastunder]

Finviz PWER charts

http://finviz.com/quote.ashx?t=pwer&ty=c&ta=1&p=d

[stocktrader001]

yes finally, very nice HOD 8.62$. 10 day MA about to cross the 50 day. i think we are ready to go. :):)

[eastunder]

Intraday Chart:

Some nice volume in this early morning move.

[eastunder]

Needham & Company maintains a 'Hold' on Power-One (PWER); Results and Guidance Likely Better than Feared, but Expect Margin Pressure to Continue

9:42 am ET 05/06/2011- Needham & Company maintains a 'Hold' on Power-One (NASDAQ: PWER). Needham analyst says, "We maintain our Hold on PWER following a 1Q11 report that was inline with its preannouncement. While PWER lowered full year revenue guidance, the small reduction was likely better than feared. In the near-term, business conditions remain challenging with excess channel inventory in Europe, but PWER s expansion into new markets in N.A. and Asia are driving growth. PWER s Power business is tracking better than expected and is driving some of the upside. However, we believe sector weakness will continue to pressure prices and margins. With the new Italian subsidy plan in place, we expect slow sector improvement to limit the stock price."

[eastunder]

Is Italy's Last Solar Gold Rush Doomed?
Eric Rosenbaum

(This helps to explain Italy, stockfreak.)

05/05/11 - 04:59 PM EDT

NEW YORK (TheStreet) -- On Thursday, Trina Solar(TSL) announced the opening of a sales office in Australia. It was a minor press release for the solar sector, yet on the day that Italy announced its solar incentive changes, a symbolic bit of news about the solar sector's future growth trajectory.

Several analysts were of the view that the final Italian policy changes were a disappointment when compared to leaks last week in the press suggesting greater concessions from the Italian government in the final days of debate. Yet there were incremental positives in Italy's new solar scheme. Solar stocks may have already priced in an Italian growth slowdown, too, or could simply be waiting on the upcoming earnings reports from many Chinese solar companies before pulling the trigger on the next solar trade.

Solar stocks held up well on the day that Italy made its solar policy changes public. There was no relief rally on the Italian market certainty on Thursday, as some had been predicting -- but, on the other hand, there was no big selloff on a day when equities were again trending down.

Notably, the Trina press release about Australia came just two days after industry bellwether First Solar(FSLR) highlighted Australia as a key market for geographic diversification. The Trina news and First Solar commentary are two more signs that even if all roads don't lead to Australia for solar modules, they won't continue to lead to Italy either.

"Italy is no longer a big growth market," concluded Wells Fargo analyst Sam Dubinsky. "There have been so many subsidy proposals in recent weeks/months, it's tough to tell whether this one is any better or worse vs. prior expectations. In addition, with the market screeching to a halt due to subsidy uncertainty, any renewed growth is somewhat of an incremental positive. However, it is clear to us that Italy's growth prospects are dampened and the market can no longer carry the industry," the Wells Fargo analyst said. He added that solar stock prices still need to reset.

"The sector is in the mid-innings of an inventory correction and pricing resets will likely continue into 3Q. While valuations for the group are low at 5-8X 2012E EPS and recent M&A (Total/SunPower) gives us hope multiples can expand at some point, investors will likely wait for earnings resets prior to bottom fishing a depressed peer group," the analyst wrote on Thursday.

The Italian government still has an overall target of 23 gigawatts of cumulative installations by the end of 2016, with an annual cap of EU6 billion to EU7 billion in solar subsidies through 2016.

The total spending cap for June through Dec. 2011 was lowered to EU300 million from EU447 million and for 2012 to EU280 million from EU373 million.

There were two central issues that had raised hopes headed into the final Italian policy changes: would the Italian government offer a grace period for ground-mounded projects through August, allowing for a mini-gold rush before the new reality set in and for all projects to receive the existing feed-in tariff rates? Secondly, would the Italian government up the capacity limit on small-scale projects to receive preferential treatment from 200 kilowatts to 1 megawatt?

The grace period for large-scale projects did not come to pass, and even if solar has the ability to install projects in the gigawatts in a matter of months, it won't be happening at the level of ground-mount projects in Italy before the end of the year.

Aaron Chew, analyst at Hapoalim Securities, wrote on Thursday, "Contrary to some initial hopes that the implementation of the new program may have been extended from May 31 to Aug. 31, ONLY the requirement for 'large' plants to register with the GSE has been pushed back. As such, previously-permitted projects under construction not only face the new lower FiT rates but are subject to the cap. In turn, while this may help save some older projects it does not imply incremental new project demand."

The good news is that Italy did increase the capacity on projects to not be put under its new solar spending cap from 200kw to 1 megawatt.

Rooftop projects of up to 1 MW will be excluded from the new subsidy spending cap between and June 2011 and Dec. 2012, which does leave "a wider loophole for project developers to skirt around the spending cap," the Hapoalim Securities analyst said.

There was a bit of negative news related to 200KW projects, though. The new solar policy in Italy allows for ground-mounted projects of up to 200KW to be built outside of the new annual spending cap in 2011 and 2012, however, only in cases where the projects are self-consuming all of the electricity generated. Analysts described this as an "effective" cap, at least at present, since there is not much of a market for self-consumed solar projects of this size that exists today.

All in all, Wells Fargo's Dubinsky saw rooftop market opportunity, even as the ground mount market opportunity waned. "There is no cap on rooftop projects up to 1MW, which is a small market today but will likely develop over time. There is also no cap on small projects up to 200KW, but energy must be self consumed for these systems or projects must be built on government land, which relegates this to a niche market for now."

The question is just how big this rooftop market is in Italy, and can become over time. Estimates have varied widely from analysts as to the true size of the rooftop market in Italy relative to the size of the ground-mount market.

The Hapoalim analyst also offered some room for opportunity in the rooftop market, but cautioned that it was still hard to foresee a bubble in a short-period of time solving the problem of growing inventory. "While demand for sub-1 MW rooftop projects leaves room for more upside than we had previously assumed, we believe the relative scarcity of large industrial/warehouse/super-store-sized buildings in Italy suggests a low likelihood of an emerging bubble in small rooftop demand. In conjunction with ~2.5 GW of solar inventory, we see a vacuum in demand in 2H11 and further declines in 2012. Though the solar stocks may be pricing in some of this risk, we continue to see further downside through May earnings season," the analyst concluded.

The recent commentary from solar companies about the second quarter and the rest of 2011 has been as expected, weak in terms of second-quarter numbers and cautious in terms of the full-year outlook due to solar incentive changes in European markets, led by Germany and Italy.

First Solar's cautious outlook on Tuesday, coupled with a weaker than expected second-quarter sales target, sent its shares down to their lowest level since last December. First Solar gained 1.5% on Thursday after its steep post-earnings decline.

Most of the major Chinese solar modules makers experienced muted trading. Trina Solar, Yingli Green Energy(YGE) and Suntech Power(STP) were close to flat in trading on Thursday. Jinko Solar(JKS) was up 1.3% on Thursday. Earlier this week, Jinko Solar reported solid first quarter earnings, though more importantly from the analyst perspective, Jinko Solar showed a movement away from Italy in its geographic diversification, from 50% to 30%. While Jinko pointed to a relatively small market like Slovakia as a new growth opportunity, analysts said that at Jinko's current level of production, it wasn't an unfair case for the company to make that Slovakia could, in fact, make a difference as Italy waned.
The biggest losses among Chinese solar stocks were in shares of LDK Solar(LDK) and Hanwha Solarone(HSOL), both down more than 2% on elevated trading volumes.

LDK Solar kicked off the earnings issues when it pre-reported that revenue could be down by as much as $100 million in the first quarter, though most of the bearish analysis has assumed companies meet first quarter numbers while missing in the second. ReneSola's commentary on pricing set off alarm bells specifically about the pressure on solar industry pricing in the second half of the year. ReneSola shares were down marginally on Thursday.

Europe's biggest solar wafer marker, REC Solar, reported its first-quarter results on Wednesday, and while REC also benefitted from strong wafer pricing in the first quarter, it's outlook was more of the same "cautiousness" about the solar sector. REC Solar warned on Wednesday that "margin pressure on modules and wafers will remain in the second quarter, and "weak market conditions may lead to inventory buildup and REC may need to reduce capacity utilization."

In the end, the Italian solar policy review played the role in 2011 played be German politicians in 2010, when the major review of Germany's feed-in tariff scheme kept solar stocks in limbo. Ironically, looking beyond the recent Italian solar headlines, Wedbush Securities analyst Christine Hersey is now looking back to Germany to provide at least part of the answer for where solar companies go from here.

"If the Italian market for larger projects slows dramatically as we expect in H2:11, we would expect installers and module manufacturers to focus more on the German solar market, given the market's stability and sensitivity to price," Hersey wrote on Thursday in reviewing the Italian policy.

After the close on Thursday, solar inverter company Power-One(PWER) reported in line results for the first quarter and reaffirmed its full year view. Most solar companies have so far maintained full year 2011 guidance, even as the second quarter outlook remains weak, and pricing pressure in the second half of the year is cited. Power-One CEO Richard Thomson dealt directly with the issues in the European solar market in his earnings commentary, stating, "We anticipate the solar market will begin to gain momentum as Italy recently passed its legislation and the German market is showing signs of heightened activity."

Power-One shares rose in after-hours trading. Power-One is one of the most heavily short stocks in the solar space.

The fundamental question hasn't changed, though, even with the Italian market now seemingly back to business, in the Wedbush analyst's opinion. "Despite the sharp focus on the demand side of the equation, we remain concerned about the amount of module supply coming online in 2011 and the potential for downward pressure on module ASPs and margins."

-- Written by Eric Rosenbaum from New York.

[stocktrader001]

squeeeeezze em out lol 8.35$