Wednesday, July 28, 2010

First Solar Clouds the Truth, Oy Vey ...

FSLR's misleading statements on Dow Jones wires:
*DJ First Solar Raises FY10 View To EPS $7.00-EPS $7.40 > Prior midpoint was $7.05/share. FSLR decided to add the word "Raises" in the EPS blurb but did not use the word "Lower" in the Sales forecast: *DJ First Solar Sees FY10 Sales $2.5B-$2.6B>

Prior Sales guidance was $2.6B - $2.7BPOTC does not believe that's a fair way to represent the facts to the public firing squad. 

We expect Wall Street analysts to call FSLR out on what we view as a grammatical game of half-truths. POTC is upset with FSLR's PR team.

Wall Street analysts should catch this small yet important nugget. FSLR continues to string along expectations while having negative growth in EPS. EPS fell 13% from last year's Q2. We hope FSLR is downgraded in the morning by several sober analysts.

Most analysts on the conference call sounded downbeat and suspicious, only one actually said "congratulations", not a good omen for bulls.

POTC to FSLR: where's the growth in EPS? Why pay 20X for a company that is negative 13% from last year's Q2 and has lowered Sales twice within the last four months? We think the options will be fine, and we would add in the morning IF GDP comes in below 2.5%. POTC's target is < $120 by August expiration.

A more damning factoid: Q1 EPS was $2.04, Q2 $1.84 = $3.88/share, so if FSLR hits the low-end of their "raised" guidance ($7.00), they will have to deliver $1.56 in Q3 and Q4. Even so, that would be a large sequential drop in earnings from quarter to quarter: $2.04 to $1.84 to $1.56 to $1.56. We ask again, why pay 20X for FSLR?

And Sales are pegged at $2.5B - $2.6B for FY10. That means they will have to come with two consecutive quarters of $697M in Sales. There was Chicago coach in the mid 1980's named Mike Ditka, he liked using the phrase "who you crappin"?, and it applies here big time.

POTC respectfully asks FSLR execs, just as we called out RIMM at $65+ and it dropped to the $40's and GS from the $160's to the $130's, "Who You Crappin First Solar"?
Q1 Sales were $568M, Q2 $588M = $1,156B, so if we subtract that number from the midpoint guidance of $2.55B, we get $1,394B/2 Q's (Q3 and Q4). FSLR would have to post $697M in Q3 and Q4, after just posting $568 in Q1 and $588 in Q2. FSLR, you are definitely not fooling any POTC subscribers.

C'mon Wall Street, it is as simple as that, downgrade the stock based on twisted guidance. 
A nice night, morning, and afternoon to all. We truly appreciate your interest and loyalty.

Saturday, July 24, 2010

CME Group Inc. (CME) ...

*DJ CME Sees Substantial CFTC, SEC Rule-Making Out For Comment By Nov, Dec.

July 29, 2010 09:32 ET (13:32 GMT)
CME Group Inc.'s (CME) second-quarter earnings rose 22%, and adjusted results topped analysts' forecasts, as the company again benefited from increased volume.

Chief Executive Craig Donohue noted that volume rose in every asset class amid "highly volatile conditions."
We sent the in depth Psychological Financial Fusion (PFF ratio) Option Trade Alert on CME Group Inc. (CME) today, Wednesday, July 28th., at 11ET.

CME will release earnings before market open on Thursday, July 29th., and First Solar (FSLR) after market close on Thursday. The FSLR Trade Alert will be sent to all subscribers at 11ET on Thursday, July 29th.
CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX self-regulatory exchanges. CME provides a range of products available across various asset classes, including: futures and options on futures based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metal, and alternative investment products, such as weather and real estate. The company offers various products that provide a means for hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, and changes in the prices of commodities.

CME Analyst Coverage: Roger Freeman of Barclays Capital, Brad Hintz of Bernstein Research, Mike Vinciquerra of BMO, James Mitchell of Buckingham Research, Rob Rutschow of Calyon Securities, Donald Fandetti of Citigroup, Howard Chen of Credit Suisse, Michael Carrier of Deutsche Bank North America, Daniel Harris of Goldman Sachs, Ken Worthington of J.P. Morgan, Dan Fannon Jefferies & Company, David Scharf of JMP Securities, Niamh Alexander of KBW, Edward Ditmire of Macquarie Research, Celeste Mellet Brown of Morgan Stanley, Patrick O'Shaughnessy of Raymond James, Rich Repetto of Sandler O'Neill, Matthew Heinz of Stifel Nicolaus, Jonathan Casteleyn of Susquehanna, Chris Allen of Ticonderoga Securities, Alex Kramm of UBS Investment Research, and Mark Lane of William Blair.

CME's Live Conference Call link for Thursday, July 29th at 8:30 AM ET

POTC will conclude Q2 with First Solar (FSLR) on Thursday, July 29th at 11ET. FSLR willl hold their live earnings conference call at 4:30ET after market close, here's the link.

First Solar is the largest manufacturer of thin film solar modules, having expanded manufacturing capacity to an annualized run rate of 55.7MW per line in the 1st quarter of 2010. By enabling clean, renewable electricity at lower costs, First Solar is providing a sustainable alternative to conventional energy sources.

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Wednesday, July 21, 2010

AMZN Dropped and Popped; Many Lessons Learned ..

POTC believes AMZN is experiencing diseconomies of scale, and the S&P analyst who upgraded will be proven wrong in the long-run. We maintain our bearish outlook on AMZN based on valuation.

DJ Amazon Cut To Average From Above Average By Caris & Co
(END) Dow Jones Newswires
July 23, 2010 09:57 ET (13:57 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.- 09 57 AM EDT 07-23-10

DJ Amazon Raised To Buy From Hold By S&P Equity
(END) Dow Jones Newswires
July 23, 2010 11:20 ET (15:20 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.- - 11 20 AM EDT 07-23-10

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Tuesday, July 20, 2010

 Our latest PFF Ratio Alert on Apple (AAPL) was sent to all subscribers at 11.01 AM ET.

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Thursday, July 15, 2010

Stock Option Trade Alert on Apple (AAPL): Tuesday, 7/20, at 11ET ..

POTC kicked off Q2 with another solid directional call on GOOG. Shares slipped sharply after hours and we anticipate further price erosion by Friday's close. Subscribers reaped a 200%+ profit overnight.

In the Trade Alert, we highlighted that GOOG's SG&A costs would hurt Q2 performance, and that is the buzz on Wall Street post report.

A well-respected technology analyst, Piper Jaffray's Gene Munster, appeared on CNBC's Fast Money post report and mentioned  GOOG's fate could be going the way of MSFT: a company in transition as growth slows. The law of "big numbers" is a good way to explain the corporate dilemma GOOG is facing. Going from today's $157B ($494/share) market cap to $250B ($787.00/share) will not be easy.

We agree with Gene Munster in the short-run at least, and believe the next few quarters will be marred by more difficult Q/Q and Y/Y comparable earnings, as increased spending crimps bottom line/profits/earnings per share.

POTC estimates ramping legal costs associated with battles over privacy as related to search and collection and storage of user data, these will be awfully high hurdles GOOG could stumble on in the weeks and months ahead. And if the U.S. Department of Justice (DOJ) gets involved, a lot of GOOG's talent could exit for greener (less regulated) technology pastures. Because so far, GOOG has been very high up on the list the brainiest prefer.

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Form 10-K link for AAPL, filed on January 25, 2010:

AAPL's Conference Call link for Q3's financial results, 5:00pm ET, Tuesday, July 20:

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