Stocks & Investing
Stocks and Investing
Stocks and Investing
Mon, March 14, 2011 
March 14, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Solar Energy sector and these stocks are the most undervalued as of today. YINGLI GREEN ENERGY HOLD-ADR (NYSE:yge), EVERGREEN SOLAR INC (NASDAQ:eslr), ENERGY CONVERSION DEVICES (NASDAQ:ener) are all expected to go Up as they are undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry
yge YINGLI GREEN ENERGY HOLD-ADR 10.5 12.87 18.41% undervalued Solar Energy
eslr EVERGREEN SOLAR INC 1.68 6.72 75.00% undervalued Solar Energy
ener ENERGY CONVERSION DEVICES 2.48 9.92 75.00% undervalued Solar Energy
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
YINGLI GREEN ENERGY HOLD-ADR (NYSE:yge) - Yingli Green Energy Holding Company Limited, together with its subsidiaries, engages in the design, development, marketing, manufacture, installation, and sale of photovoltaic (PV) products in the Peoples Republic of China and internationally. The company offers PV cells, PV modules, and integrated PV systems, as well as polysilicon ingots, blocks, and wafers. It sells its PV modules to PV system integrators, installers, and distributors in Germany, Spain, Italy, Greece, France, South Korea, the United States, and the People's Republic of China under the brand names of Yingli and Yingli Solar. The company also offers its integrated PV systems directly to end-users or to contractors for use in the electricity projects, as well as to mobile communications companies in the People's Republic of China. Yingli Green Energy Holding Company Limited was founded in 1998 and is headquartered in Baoding, the Peoples Republic of China.
EVERGREEN SOLAR INC (NASDAQ:eslr) - Evergreen Solar, Inc. develops, manufactures, and markets solar power products primarily in the United States and Europe. The company manufactures String Ribbon solar panels utilizing its proprietary wafer manufacturing technology, which involves a process to produce multi-crystalline silicon wafers by growing thin strips of silicon that are cut into wafers. Its products include wafers, which are flat pieces of crystalline silicon that can be processed and assembled into solar cells; cells, devices made from silicon wafer and convert sunlight into electricity by means of a process known as the photovoltaic effect; and panels, which are assemblies of solar cells that are electrically interconnected and laminated in a durable and weather-tight package. It sells its products through domestic and international distributors, system integrators, project developers, and other resellers. The company has a strategic partnership agreement with Q-Cells AG. Evergreen Solar, Inc. was founded in 1994 and is based in Marlboro, Massachusetts.
ENERGY CONVERSION DEVICES (NASDAQ:ener) - Energy Conversion Devices, Inc. engages in the design, manufacture, and sale of photovoltaic (PV) products. The company operates in two segments, United Solar Ovonic and Ovonic Materials. The United Solar Ovonic segment provides PV laminates that generate clean and renewable energy by converting sunlight into electricity. It also involves in the design, development, and installation of rooftop and BIPV systems and applications. Its products are used in rooftop and building integrated applications. This segment offers its products to commercial roofing materials manufacturers, builders and building contractors, and solar power installers/integrators. The Ovonic Materials segment invents, designs, develops, and licenses materials and products based on the companys materials science technology. This segment also commercializes the NiMH materials and consumer battery technology. The company operates in the United States, Germany, France, Italy, South Korea, Japan, Hong Kong, and China. Energy Conversion Devices, Inc. was founded in 1960 and is headquartered in Rochester Hills, Michigan.
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