OPG Power Ventures – We’re Back In

Wednesday, 14 March, 2012 17:35 Written by Paul 0 Comments

So we’ve top-sliced our PV Crystalox Solar holding (pocketing a handy 15% in five weeks into the bargain) and taken up a little OPG Power Ventures with the proceeds. After buying in to PV Crystalox Solar at 4.40, then again at 5.15 and yet again at 5.40 pence, even the optimist in me was saying, hang on there mate, slow up a bit or you’ll be looking for payday loans.

We’re still holding 70K shares in PV Crystalox Solar – averaged in at 4.74 pence – and with interims due at the end of the month, I’m quietly optimistic that anything but catastrophic news (it can’t get much worse than what’s already been reported and factored into the price, can it?) may see a baby bounce in the price. And when you’ve traded at multiples of 35 times where you’re currently at, even a baby bounce can rapidly turn a holding such as ours into a double-bagger. But I’m getting ahead of myself.

You may remember we wrote about OPG Power Ventures late last year. They’re an Indian power company with ambitious (fully-funded) plans to increase their capacity five-fold by by the end of 2013. We held them for a period in 2010, taking a small profit before looking for something a little more speculative.

Now, supplying power to India is liking offering beer to a stag party – you know it’s going to get taken up.

So with that in mind, here in a nutshell – and rather lazily copied and pasted directly from the OPG website – is the over-riding reason why we’re back in:

OPG…has a…current operating capacity of 107 MW. A further 537 MW is under construction or development with all of this capacity scheduled to come on-stream during 2012 and 2013. Another 600 MW is in the pipeline, giving a projected total capacity of 1250 MW by 2015, a greater than tenfold increase from the current position.

Thanks again for dropping by.

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PV Crystalox Solar – I’m In

Wednesday, 08 February, 2012 13:31 Written by Paul 4 Comments

Now it’s no news to anyone who has followed us on our little journey that we’ve a penchant for a highly speculative buy. Add a green energy aspect to the mix and it’s like a waving a pizza, at mid-70′s Elvis (too soon?).

So, when PV Crystalox Solar plunged to below 10 pence a share late last year, we placed it on the radar.

When it fell below five pence it was like adding another layer of cheese, there seemed no way I couldn’t take a little speculative slice (well three actually: at 4.4, then 5.15 and 5.4 pence to be exact).

Chart courtesy of SharePrice.co.uk

Now I didn’t dive in here willy nilly – God (and Elvis) forbid! We’ve been in and out of a healthy PV Crystalox Solar in the past, having bought in and sold out in 2010 — when it was trading in the 50 pence range. So we’d done our homework. We just needed to get current. And for current we looked no further than the latest news out of PVCS, it’s Interim Management Statement.

When an Interim Management Statement is brought forward and begins, “In light of the ongoing difficult market conditions in the solar industry” (and the company in question is in the solar industry) you quickly get the feeling that lean times are ahead.

In what was a statement awash with negatives, I’ll pick out a handful of low-lights:

“The anticipated recovery in PV end-market demand stimulated by lower module prices has been weaker than expected in the second half of 2011.”

“Since our interim results statement wafer prices on the spot market have decreased by more than 20%, meaning that the overall decline since April is greater than 50%.”

“…customers have reduced production in response to the weak market conditions and accordingly the Group now expects full year shipment volumes to be in the range 360-390MW…….below the 400-450MW indicated at the time of our interim results on 18 August 2011.”

Okay, that’s a cocktail of negatives, and the market dealt with the them as expected; halving the share price.

But at least we’re dealing with a board that’s willing to quickly make the tough decisions to minimise any unnecessary outflow of cash in the short term. To ensure PV Crystalox Solar lives to trade another day:

“In light of these market conditions the Board has resolved to take appropriate actions to manage the business through these difficult times and to conserve the Group’s cash. In the short term the Group intends to reduce production output at its UK ingot and German wafer operations. The Board also intends to suspend production temporarily at its polysilicon facility in Bitterfeld, Germany. Regrettably these actions will lead to significant job losses in the UK and short time working in Germany. In addition the Group will continue to have discussions with its suppliers in order to reduce costs and will continue to seek further methods of achieving greater efficiencies within the Group’s operations.”

Harsh measures and although the board believes that: “the medium-term outlook for solar installations remains positive“, there’s still China out there who’s doing what PVCS does but in China — with all the cost advantages that are inherent with production in that neck of the woods.

So why invest?

Now I know there’s a hell of long road back for PV Crystalox Solar and time will tell if it’s even navigable. So let’s be honest here, the price is a fairly big factor. (the day after I bought, PVCS shot up over 20%, not even a pence, a drop in the ocean a few years back) but when you buy in at exceptionally low prices even small increases can result in big paper profits.

Anything that’s traded at a multiple of 40 times where it’s currently at, has limited debt and a comparatively healthy cash position (albeit, probably diminishing by the day) in my opinion (and this my amateur opinion and in no way should be construed as investment advice), is worth a punt.

Oh, and I love the green energy aspect, always have.

Cue harp music punctuated by dolphin noises and Sumatran birdsong: and part of me longs to believe that one day all energy will be green and that there’ll be room for lots of players in the solar industry from all parts of the world — even Europe. Is that too much to ask?

Sale – PV Crystalox Solar

Monday, 10 January, 2011 10:00 Written by Paul 0 Comments

The 30th December 2010 marked a sad day for Investor Trader. Following the sale of our entire holding of PV Crystalox Solar (PVCS.L) it was the first time since we began our little project in April 2009, that our portfolio held no wind or solar energy shares.

Over the journey at different stages a large percentage of our portfolio has been tied up in Renesola. That is until they packed up their AIM listing and took all their toys to the New York Stock Exchange in November. We also held shares in Clipper Windpower until they became a UTC takeover target in November last year.

With the sale of PV Crystalox Solar it was our decision. A case of possibly being able to make our investment penny perform a little better elsewhere.

Here’s why we jumped in with PV Crystalox Solar to begin with. Small Company Share Watch also wrote a bullish piece in their May 2010 issue and those guys rarely get it wrong.

To be honest, we probably didn’t give PV Crystalox Solar the run it deserved. We bought in on 18th October 2010 – 1,719 shares at 57.21 pence a share – and sold out on the 30th December 2010 – 1,719 shares at 51.03 pence a share. We took a loss in the region of a hundred quid before costs.

I find when your portfolio is performing well and travelling with a few strong gainers anything that is sliding – even slightly – comes under scrutiny. When you’re running with a portfolio of over 10 shares there’s constantly two or three that fall into that category. It’s a danger because you can fall into the trap of over-trading.

Here’s the three month chart (courtesy of SharePrice.co.uk) for PV Crystalox Solar which covers the period we held. Interesting to note it’s put on 10% since we left. I hope it does well going forward, I’d love to jump back in and hold a performing PVCS for years to come.

If anyone has any solar or wind power share tips we’d love it if you posted them in the comments box below.

Thanks again for dropping by.

Sale – Renesola

Tuesday, 09 November, 2010 11:57 Written by Paul 0 Comments

With last rites being performed on Renesola’s AIM listing before shifting their focus solely to their New York Stock Exchange listing, last Thursday 4th November we sold off our final tranche of 500 shares of our portfolio stalwart for 4.0150 pence a share and a total return of £2,007.50 before dealer costs.

We were averaged into Renesola at £1.12 a share so we took a 350% profit on Renesola this time round. Renesola has always been good to me over the years. Taking me up toward the giddy heights of £7 before I lost my nerve and smacked the sell key and letting me slip back in under a quid in that very same year. A favourite of the shorters so there’s always been plenty of banter on the BBs to boot. It’s been a wonderful ride.

Since we set out on the Investor Trader journey back in April 2009, Renesola has been our most heavily traded share, having bought in and out on nine occasions in the past 18 months. She was our financial muse. We’ll be sad to see her go.

As a token of our respect we’ve splashed a little cash back into the solar market with PV Crystalox Solar and of course there’s still a Chinese connection in our portfolio with Asian Citrus Holdings Limited and Hutchison China Meditech which are both performing admirably.

But nothing can ever replace that special blend of an alternative energy AIM share from China, in my mind at least. They’re not tears on my keyboard, just sweat from this spicy Szechuan chicken.

Purchase – PV Crystalox Solar

Tuesday, 19 October, 2010 14:42 Written by Paul 0 Comments

So with my Renesola adventures due to come to an end in the coming weeks, the first of my four purchases this week, will come as a no-brainer to those who’ve followed Investor Trader over the journey.

PV Crystalox Solar is a, yep, you guessed it, solar energy company. Though it lacks the Chinese connection it’s still a major player in Asia (especially Japan). We purchased 1,719 shares at 57.21 pence a share.

To quote from the tin:

With 25 years (28 now) in solar technology development, PV Crystalox Solar is a leading manufacturer of multicrystalline silicon ingots and wafers, the key component in solar power systems.

Its customers, the world’s leading solar cell producers, combine these wafers into solar modules to harness the clean, silent and renewable power from the sun.

From a purely chartist point of view I quite like our entry point. I’m hoping the dips in May and October of this year constitute a double bottom.

After a pretty ordinary 2009 which saw PVCS earnings per share drop from 21 pence to a little over 6 pence, the company is looking a lot healthier as production is ramped at their poly-silicon plant in Germany and production costs continue to drop.

On the flip side, prices too, continue to drop. But as prices drop we edge ever closer to “grid parity” and the potential “solar rush” the industry would no doubt enjoy when that day comes.

I dare say a lot of UK Renesola holders who want to keep their investments on this side of the pond will be taking a closer look at PVCS.L in the coming weeks. And despite everything fundamental and what the charts say, my gut just tells me that investing in solar long term can’t be a bad thing!

Thanks again for dropping by and remember to pay Kiva a visit and help a third world entrepreneur get up and running.

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