Friday, May 23, 2008

Evergreen Solar Announces 1 Billion In Contracts

Evergreen Solar (eslr) surged over 20% yesterday as it announced that is had signed two contracts worth approximately 1 billion dollars. Evergreen Solar and German-based Ralos Vertriebs GmbH signed an agreement valued at approximately $750 million for panel deliveries beginning in 2008 and extending through 2013. They also signed an agreement just last week with an unnamed United States-based installer, for approximately $250 million. Both of these contracts are going to be manufactured in their Devens, Massachusetts plant.

In addition to the two contracts listed above Evergreen Solar (eslr) already has a backlog of $850 million from six different sources to be completed in Ever-Q, it's German based joint venture.

Here is what the big whigs at Evergreen Solar had to say about the recent contracts...

“We offer our customers a long-term value proposition because our string ribbon technology consumes less than half of the polysilicon as compared to the industry average, which enables us to provide a unique combination of cost and cell conversion efficiency," said Richard M. Feldt, Evergreen Solar's president and chief executive officer. “We will enter into selective long-term supply agreements with additional companies that also bring differentiated value to their customers and serve markets that are at the forefront of solar growth.”

So, here we are watching a company that has 1.85 billion dollar in backlog yet the entire company itself is only worth 1.32 billion by market cap! Based on this factor alone it would appear that Evergreen Solar is grossly undervalue at these levels. One of the biggest problems with solar companies is the perceived shortage of polysilicon. Evergreen has this covered already though as they have signed several long term supply agreements over the past year.

Here at Stock Picky we have been behind ESLR for a long, long time and we still believe that it is a great buy even at these much higher levels then just a couple days ago. The key of course is to not buy all at once, take advantage of the dips and always invest for the long-term. After all, this stock was a buy at $100 oil, but now at $135 people will be flocking to alternative energy plays like this one. To research more into this company check out all of our Evergreen Solar articles here!

1 comment:

  1. Hi I read your blog and you mentioned ESLR. With the big contract,,on any negative day this could be a trading stock in my opinion. Nice info here, take care