Tuesday, September 1, 2009

Louis Navellier and CSUN

CSIQ was not the only disaster in Louis Navellier's $5.000/year Global Growth solar plays. He also played a remarkable trade with CSUN. Actually, he traded CSUN twice from September 2008 and April 2009. Let's go.

September 2nd 2008
China's China Sunergy (CSUN) is an exciting alternative energy company that makes photovoltaic cells used in solar energy panels. The company's China plant produces up to 320 megawatts of solar cells per year. The vast majority of its sales come from within China, and as this nation's massive economy struggles to reduce pollution but still provide power to its crucial manufacturing companies, solar will be an important part of the future. Global demand for solar power is expected to more than double, from 6-gigawatts in 2008 to 14-gigawatts in 2010, and the sheer size and industry of China makes it a fantastic market for this growth. But Sunergy is doing pretty well in the here and now, too! In the second quarter, China Sunergy's earnings rose to 8 cents per share, compared with a net loss of 14 cents per share a year ago, and sales nearly doubled. The analyst community was blown away by CSUN's whopping 166.7% earnings surprise and a 17.8% sales surprise! Rising costs for polysilicon, a key raw material in photovoltaic cells, has cut into margins a bit, but the company has continued to grow and now has sufficient economies to weather this increase. The stock is a great buy but it can be thinly traded, so I recommend that you only place a limit order within $0.10 of the stock's previous close. If you don't, your purchase could artificially inflate the price of the stock, and then you'd take a hit later as the market corrects. You can also spread out your purchase over several days instead of buying all at once.
Buy below $12.18
Buy price: $9.98

September 8th 2008
Buy below $10.85

September 15th 2008
Buy below $9.68

September 22nd 2008
China Sunergy Co. Ltd. ADS (CSUN) was added to the NASDAQ clean-energy market index today. This should help its price performance in the near term. The NASDAQ Clean Edge U.S. Liquid Series Index will add six China stocks today, including China Sunergy. This index is designed to track the performance of clean-energy companies that are publicly traded in the U.S. The Index includes companies engaged in the manufacturing, development, distribution and installation of emerging clean-energy technologies such as solar photovoltaics and biofuels.
Buy below $10.98

September 29th 2008
China's China Sunergy (CSUN) said last Thursday that it had signed a seven-year sales agreement with Wuxi Guofei Green Energy Source Co of China. The deal calls for Sunergy to provide Wuxi with 10 megawatts of solar cells each year from 2009 through 2015.
Buy below $8.30

At the beginning of October 2008 even Mr. Navellier realized the situation was not good and his portfolio was full of crap. So, instead of giving increasing buy below prices he started to give decreasing sell above prices.

October 6th 2008
Sell above $7.28

October 13th 2008
Sell above $6.20

October 20th 2008
Sell above $5.28

October 27th 2008
Sell above $4.88
November 3rd 2008
Sell above $4.62
November 10th 2008
Three stocks hit our "Sell Above" targets last week: China's China Sunergy Company (CSUN) Ireland's Icon (ICLR), and Israel's Partner Communications.
So, after having bought CSUN at $9.98 and decreasing the sell price for one month, Mr. Navellier was finally able to sell it at $4.62 for a 53% loss.
He was so happy of this performance that on March 30th 2009 he decided to buy CSUN again, at $2.97.
China's China Sunergy (CSUN) and Bermuda's Validus Holdings (VR) join the buy list this week as we look to build on an already impressive track record for March. Here are the details:
China's China Sunergy (CSUN) makes photovoltaic cells used in the manufacture of solar energy panels. Through its operating subsidiary Nanjing PV, the company produces up to 320 megawatts of solar cells per year and is expanding its output. In addition to making positively charged P-type PV cells, China Sunergy is also conducting research into production of new types of solar cells, including negatively charged N-type cells. The science behind this is very complex, but in a nutshell this provides CSUN with greater versatility and a chance to broaden its market share. While some German firms buy China Sunergy's PVcells, the vast majority of its sales come from within China itself, so if it can expand its international business, the sales potential would be tremendous.
The company recently entered into an agreement to supply solar photovoltaic products to Global Service in Taiwan. Under the agreement, China Sunergy will supply up to 35 megawatts of solar photovoltaic products to Global Service this year. I will say that the company warned that it had order cancellations in the fourth quarter and does not anticipate being profitable until the second quarter–but I remain very confident in CSUN's profit potential. An oversupply of photovoltaic cells due to the economic downturn continues to weigh on the solar industry in the wake of a pullback in solar subsidies by Germany and Spain.
Last week, it was reported that China's Ministry of Finance is going to subsidize solar projects. Government subsidies are what transformed places like Germany and Spain into solar hotspots, so this is a great opportunity. With enough government support, China's domestic solar market could come to dwarf the European markets and help its domestic solar industry become increasingly dominate worldwide. CSUN broke out last week on this news and is a good buy for aggressive investors. China Sunergy may be a bit more volatile than some of our other holdings, but could easily double your money in just several weeks if the cards play out in our favor!
Buy below $3.39
April 6th 2009
Buy below $3.77
April 13th 2009
Buy below $3.75
April 20th 2009
This week, I recommend that you sell China's China Sunergy Company (CSUN), Israel's NICE-Systems (NICE) and Taiwan's Siliconware Precision Industries (SPIL).
While China is still a very hot spot and the focus of our Buy List, China Sunergy (CSUN) has been pretty sluggish and has lagged behind the rest of our stocks. The stock got caught up in the broader market slide across the last week, but otherwise would have been essentially flat since its purchase three weeks ago. I want you to trade out of this stock and invest in other Chinese companies that are beating the market significantly. At Global Growth, we look for market leaders–not stocks that run with the herd.
Close price: $2.61
Once again, the sell price was lower than every buy below given. $2.97 to $2.61 makes another 12% loss, to be added to the previous 53%.


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