24/7 Wall St. » SQM

Eight Countries With Credit Ratings Set to Rise Next Year

Administrator — Wed, 21 Dec 2011 17:14:50 +0000

It seems that all of the nations around the world are facing sovereign credit ratings downgrades or warnings of downgrades. After the United States lost its prized “AAA” rating, the threat of downgrades hangs over all of Europe. Before assuming that the whole financial system is going down the drain with Europe, it is important to realize that some key developing nations are still growing strongly and have better credit metrics. More than 15 nations may even see one or more of the top three ratings agencies upgrade their sovereign credit ratings.

24/7 Wall St. has focused on the ratings with a “positive” outlook from Standard & Poor’s, Moody’s and/or Fitch with a bias towards nations that investors can easily invest in via ADR shares, closed-end funds, and exchange-traded funds (ETFs). The featured nations that may be upgraded in 2012 are Brazil, Chile, China (with Hong Kong), Indonesia, Peru, Russia, South Korea, and Turkey.

Read: Nations Set For Credit Ratings Beyond Upgrades, Beyond The Euro Crisis

There is another slew of countries for which S&P has a “positive” outlook stance: Azerbaijan, Bolivia, Ecuador, Honduras, Latvia, Panama, and Sri Lanka. Unfortunately, these nations are almost impossible for Americans to invest in due to their size, the small number of public companies, and a lack of ETFs or mutual funds covering them.

The 24/7 Wall St. list is presented alphabetically and features relevant ratings. Also included are economic details and important developments to consider. Lastly, we have provided a list of the key closed-end funds, ETFs, and ADRs specific to each nation. Population estimates and purchasing power parity GDP for 2010 were taken from the CIA World Factbook.

Filed under: ADR, Austerity, Banking, Bonds, China, Commodities, Currency, Economy, Editor's Picks, Emerging Markets, ETF, International Markets, Labor & Unions Tagged: BAP, BBD, BCH, BRF, BRFS, BVN, BZF, CEE, CH, CHN, CZZ, ECH, EIDO, EPU, ERJ, ERUS, EWH, EWY, EWZ, FXI, GOL, GXC, IDX, IF, KEF, KEP, KF, LFL, MBT, MTL, PBR, PEK, PKX, RBL, RSX, RSXJ, SAN, SCCO, SKM, SKOR, SQM, TDF, TKC, TKF, TLK, TRF, TUR, VALE, VIP

Already? The Coming Electric Vehicle Battery Glut (AONE, HEV, SQM, NEM, GLD, MXWL, LIT)

Administrator — Fri, 15 Jul 2011 16:09:07 +0000

There’s another case where supply of an alternative energy technology is very likely to overwhelm demand. There is plenty of evidence that such a situation is taking hold in the solar PV manufacturing space, but that is expected to be temporary if you consider possible oversupply until 2013 temporary.

A larger oversupply problem faces makers of lithium-ion batteries for electric vehicles. The cars have not exactly been flying out of dealer showrooms, and battery makers need to develop partnerships with at least one EV maker in order to have a chance of succeeding. According to a report from Lux Research, A123 Systems, Inc. (NASDAQ: AONE) and Ener1, Inc. (NASDAQ: HEV) have generated “more headlines than momentum,” and have developed only minor partnerships that are not likely to produce significant revenue. Another battery maker, Valence Technology Inc. (NASDAQ: VLNC) has not made profit in any of the last four quarters and is not expected to report one for its first fiscal quarter of 2012 which ended on June 30th.

While lack of partnerships may be a problem, the larger problem is the positively booming supply. Global lithium-ion manufacturing capacity is expected to reach 21,000 megawatt-hours by year-end 2012, and nearly 30,000 megawatt-hours by the end of 2015.

By 2012, demand for Nissan Leaf-class EVs is expected to reach 6,000 megawatt-hours (about 250,000 vehicles) in 2015 if the price of oil is $200/barrel. If oil reaches just $140/barrel, similar demand could be delayed until 2020.

Now it’s possible, of course, that lithium-ion battery makers will be able to expand into grid storage applications, but it remains unlikely that grid storage will take all the excess capacity. There are other, cheaper solutions for grid storage.

Chemical & Mining Co. of Chile Inc. (NYSE: SQM) is the world’s leading supplier of lithium and its shares have jumped more than 80% in the past 12 months. Top gold miner Newmont Mining Corp. (NYSE: NEM) has seen its share price fall in the same period and even the SPDR Gold Trust (NYSE: GLD) has risen a mere 30% or so. SQM’s trailing P/E is 41.26 and its forward P/E is 25.04. Price/book ratio is 9.83. If demand for lithium-ion batteries dries up, SQM shares will not trail far behind.

One company that Lux Research likes is Maxwell Technologies Inc. (NASDAQ: MXWL), a leading maker of supercapacitors that can be used in some key energy storage applications, like the start-stop fuel saving technology that most automakers are adopting for their internal combustion engines. But Maxwell too has had profit problems and its forward P/E is higher even than SQM’s. Maxwell’s price/book ratio is also a very high 4.28.

An ETF that is supposed to track the future of batteries via lithium is the Global X Lithium ETF (NYSE: LIT). So far it is ignoring these concerns as its is up 1% at $19.62 today.

Electric vehicle sales may grow in the next few years, but a lot depends on the pump price of gasoline. But even if those prices rise above $5-$6/gallon, there will still be more than enough lithium-ion battery- making capacity.

Paul Ausick

Filed under: Alternative Energy, Autos, Infrastructure Tagged: AONE, GLD, HEV, MXWL, NEM, SQM

Opportunities & Risks In Clean Energy Funds (PBW, TSLA, SOLR, SQM, PPO, TAN, FSLR, MYBUF, TSL, SPWRA, GEX, CREE, ICLN, OEZVF, EOC, KWT, WFR)

Administrator — Wed, 08 Jun 2011 17:01:33 +0000

Clean energy funds first sprung up in about 2005, with the PowerShares WilderHill Clean Energy Fund (NYSE: PBW). Others have followed, but for the most part these funds have fairly low assets under management and the market for the funds is relatively limited as demonstrated by the volumes. The fall from grace after 2008′s alternative energy peak has not exactly been the greatest help in the world for these funds.

In addition to the PowerShares fund, we’ll take a quick look here at the Guggenheim Solar ETF (NYSE: TAN), Market Vectors Global Alternative Energy ETF (NYSE: GEX), iShares S&P Global Clean Energy Index Fund (NASDAQ: ICLN), and Market Vectors Solar Energy ETF (NYSE: KWT).

PowerShares WilderHill Clean Energy (NYSE: PBW) is a non-diversified index tracker. The largest of its 58 holdings is SunPower Corp. (NASDAQ: SPWRA) at 3%, followed by Tesla Motors Inc. (NASDAQ: TSLA), GT Solar International Inc. (NASDAQ: SOLR), Sociedad Quimica y Minera de Chile S.A. (NYSE: SQM), and Polypore International Inc. (NYSE: PPO). The fund’s market value is $448.7 million, and its 52-week range is $7.98-$11.42. PBW’s NAV is 9.00.

Guggenheim Solar ETF (NYSE: TAN) invests at least 90% of its assets in stocks included in the MAC Global Solar Energy Index. It’s top five holdings are First Solar Inc. (NASDAQ: FSLR) at 14.38%, Hong-Kong listed GCL Poly Energy Holdings Ltd. at 8.99%, Meyer Burger Technology AG (OTC: MYBUF), Trina Solar Ltd. (NYSE: TSL) at 5.3%, and SunPower Corp. (NASDAQ: SPWRA). Assets under management total $165.2 million and the NAV at June 7th was $7.12. The 52-week range is $6.12-$9.16.

Market Vectors Global Alternative Energy ETF (NYSE: GEX) tracks the price and yield performance of the Ardour Global Index, and invests at least 80% of assets in stocks included in that index. The fund’s top five holdings are First Solar at 8.8%, Vestas at 8.37%, Cree Inc. (NASDAQ: CREE) at 6.21%, Enel Green Power SpA at 6.1%, and Iberdrola Renovables SA at 5.73%. The fund has $140.3 million of assets under management and its NAV is $19.22. The shares’ 52-week range is $17.81-$22.76.

iShares S&P Global Clean Energy Index Fund (NASDAQ: ICLN) tracks the price and yield performance of the S&P Global Clean Energy Index. The top five holdings are Germany’s Verbund AG (OTC: OEZVF) at 5.58%, Iberdrola Renovables at 5.47%, Empresa Nacional de Electricidad S.A. (NYSE: EOC) at 5.46%, China Longyuan at 5.44%, and SunPower at 5.4%. The fund’s net assets total $71.1 million and the NAV is $16.54. The shares’ 52-week range is $14.09-$19.00.

Market Vectors Solar Energy ETF (NYSE: KWT) is an index tracker for solar energy companies. It’s top five holdings are First Solar at 9.54%, MEMC Electronic Materials Inc. (NYSE: WFR) at 8.89%, Trina at 8.54%, SunPower at 6.35%, and Norway’s Renewable Energy Corp. ASA at 6.07%. The fund’s assets under management total just $29 million and its NAV is $10.55. The shares’ 52-week range is $9.04-$14.33.

Many of these funds (and their components) are down considerably and they are down so much against the 2008 peak-energy highs that many investors would rather not be reminded. 24/7 Wall St. has maintained for quite some time that many alternative energy investments may really just be leveraged oil bets in disguise. These have not even lived up to that universally when oil rose. Now investors will hope that the decommissioning of nuclear plants can be the next frontier for growth. If not, global austerity measures may force solar projects to actually be evaluated on their real underlying costs basis just like other projects.

Paul Ausick

Filed under: Alternative Energy, ETF, Green Biz, Mutual Funds, Nuclear, Oil & Gas, Utilities Tagged: CREE, EOC, FSLR, GEX, ICLN, KWT, MYBUF, OEZVF, PBW, PPO, SOLR, SPWRA, SQM, TAN, TSL, TSLA, WFR

Top Analyst Upgrades and Downgrades (AKAM, AEO, BA, KO, DE, EBAY, FDX, FSLR, LDK, NTSP, SQM, SSCC, SHO, SPWRA, TIN, TSO, YUM)

Administrator — Mon, 29 Nov 2010 13:17:34 +0000

These are some of this Monday’s key analyst upgrades, downgrades, and initiations seen in Wall Street research calls.

Akamai Technologies Inc. (NASDAQ: AKAM) Raised to Buy w/ $60 target at Lazard.
American Eagle Outfitters, Inc. (NYSE: AEO) Raised to Buy at Janney.
Boeing Co. (NYSE: BA) Cut 2011 estimates at RBC and JPMorgan.
The Coca-Cola Company (NYSE: KO) Reiterated Buy but raised target to $72 from $66 at BofA/ML.
Deere & Co (NYSE: DE) Raised to Outperform at Wells Fargo.
eBay Inc. (NASDAQ: EBAY) Cut to Hold at Stifel Nicolaus.
FedEx Corporation (NYSE: FDX) Raised to Outperform and $111 price target at Credit Suisse.
First Solar, Inc. (NASDAQ: FSLR) Raised to Buy and $148 target at ThinkEquity.
LDK Solar Co., Ltd. (NYSE: LDK) Raised to Buy and $15 target at ThinkEquity.
NetSpend Holdings, Inc. (NASDAQ: NTSP) Started as Outperform at Wells Fargo; Started as Buy at BofA/ML; Started as Buy at SunTrust.
Chemical & Mining Co. of Chile Inc. (NYSE: SQM) Raised to Overweight at JPMorgan.
Smurfit-Stone Container Corp. (NASDAQ: SSCC) Raised to Buy at Goldman Sachs.
Sunstone Hotel Investors, Inc. (NYSE: SHO) Raised to Buy at Stifel Nicolaus.
SunPower Corporation (NASDAQ: SPWRA) Raised to Buy and $20 target at ThinkEquity.
Temple-Inland Inc. (NYSE: TIN) Cut to Neutral at Goldman Sachs.
Tesoro Corporation (NYSE: TSO) Raised to Outperform at Macquerie.
YUM! Brands Inc. (NYSE: YUM) Raised target to $58 from $54 at Credit Suisse.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Filed under: Analyst Calls Tagged: AEO, AKAM, BA, DE, EBAY, FDX, FSLR, KO, LDK, NTSP, SHO, SPWRA, SQM, SSCC, TIN, TSO, YUM

The 25 Most Important Alternative Energy Companies

247wallst — Tue, 19 Oct 2010 09:23:49 +0000

Alternative energy is big business — and getting bigger. The industry includes hundreds of companies that make a piece of the continuously expanding jigsaw puzzle that is the alt energy space.
Rather than trying to pick winners and losers — which at this point is probably impossible — we’ve tried instead to identify the 25 companies we think will shape the alt energy industry for the next three to five years.

To make this determination, we’ve looked at a number of characteristics we think will play an important role in shaping the industry’s future. First, we chose companies we think are market leaders based on their market capitalization, revenues, and technology leadership.

Second, we tried to assess the longer-term opportunities a company has based on its current influence, the strength of its competitors, how much influence government policy will have on its success, and how likely it is and how quickly the company’s products can be implemented at a reasonable scale.

Third, we tried to assess a company’s access to capital. Some of the questions we asked were: Is it publicly traded or privately held, how strong is its balance sheet, and, perhaps most important, how much support can it expect from government?

Fourth, we looked at a company’s customers, their size, and their influence in their own industries. Finally, we tried to assess how high the barriers are to competitors entering the same sector. Likewise, how well can a company fight off competition that’s already in the sector?

Not every company has a top rating in each category, but the ones we’ve picked have a good many of them.

In addition to looking at the companies, we’ve also identified a few issues that are going to provide the context for alt energy companies in the years ahead. Perhaps the most important of these, from a commercial standpoint, is what policies China and the US will adopt. China plans to spend aggressively on its own domestic alt energy initiatives, and it is pouring enormous amounts of money into the coffers of several of the country’s manufacturers.

Other areas that bear watching are consumer acceptance for electric vehicles and plans for infrastructure investments in the electricity grid and in smart-grid technology.

Solar Photovoltaic

There are dozens of companies developing products to tap into the solar PV market. The issues in that market come down to volume and cost compared with efficient conversion of sunlight into electricity. Thin-film technology has emerged as the cost leader, and, because it is somewhat easier to manufacture, the volume leader as well. Crystalline silicon technology has been more costly to produce, but the higher conversion rates have helped keep the costs reasonably comparable to thin-film cells.

The ‘holy grail’ of solar PV makers is cost parity with fossil fuel-generated electricity, like coal-burning power plants. The race to parity is the next great competition. The first company to cross the finish line will need to get a lot of help from the makers of all the equipment that goes into finishing and installing solar panels, of whatever technology. Solar PV makers need to ramp production, lower costs, and win big contracts for utility-scale projects.

1. First Solar Inc. (NASDAQ:FSLR) was until recently the volume leader in the solar PV industry. It’s thin-film products offer a significant price advantage over the mono- and multi-crystalline products offered by its competitors. From 2009 to 2010, First Solar reduced its cost by 14% to $0.76/watt. No other solar technology is even close. Combined with a market cap of around $12 billion, a solid European customer base (which could erode if government subsidies are cut substantially or eliminated), a solid balance sheet and its own installation pipeline, First Solar is in a very good position to prosper.

The company also has a joint venture in the works with a Chinese partner to build a 2,000 megawatt solar PV project in Inner Mongolia. First Solar’s contract for the deal is being challenged by some Chinese solar PV makers. If the company loses the deal it would be a big blow to its plans. However, losing the deal may not be the worst thing that could happen. That is because it would prevent First Solar from having to share its technology with the Chinese, which is a condition of the original contract award. Keeping the crown jewels in the vault may be worth more than the few billion that the Mongolian project will generate.

Also Read: New Study On Broadband Quality Ranks US 15th

2. SunPower Corp. (NASDAQ:SPWR) currently boasts the highest conversion rate of sunlight to electricity of all the solar PV makers. The company’s components business accounted for 61% of all its revenues in 2009, up from 40% in 2007. The company’s components include solar panels and inverters. SunPower’s systems business declined from 60% in 2007 to 39% in 2009. To turn that back around, SunPower has acquired a downstream company with a good project pipeline. That acquisition should start the turn-around in 2010, and continue to improve in 2011.

SunPower’s international business accounted for 71% of its 2009 sales, and it has a strong position in Germany, which is expected to install about 6,700 megawatts of solar PV in 2010. One megawatt generates enough electricity to power 800 households for an entire year. SunPower, however, is not among the low-cost providers and must depend on its superior (for now) conversion rate to differentiate itself from its competitors. For SunPower to live up to its place on our Top 25, it needs to maintain its technological leadership and become more competitive on downstream projects.

Filed under: Alternative Energy, Green Biz Tagged: ABAT, ABB, AMSC, AONE, CREE, CZZ, FSLR, GE, IRVSF, ITRI, LDK, MCP, MXWL, SI, SMLNF, SPWR, SQM, STP, TSL, VWSYF, YGE

Investing in Lithium Gets Easier, Finally an ETF (LIT, SQM, FMC, ROC, AONE, XIDE, ABAT, HEV, ULBI, CBAK, VLNC)

Administrator — Wed, 21 Jul 2010 19:44:05 +0000

Investing in global Lithium demand trends just became much easier. An ETF is coming out this week called the Global X Lithium ETF. It is not a commodity fund but it does track the components of the Solactive Global Lithium Index. The index tracks the performance of the lithium industry, which is companies that mine or explore for lithium, sell and distribute lithium, and those which are big end-users of lithium battery production. Some of the big or recognized stock and ADR names that comprise this ETF are Chemical & Mining Co. of Chile Inc. (NYSE: SQM), FMC Corp. (NYSE: FMC), Rockwood Holdings Inc. (NYSE: ROC), A123 Systems, Inc. (NASDAQ: AONE), Exide Technologies (NASDAQ: XIDE), Advanced Battery Technologies, Inc. (NASDAQ: ABAT), Ener1, Inc. (NASDAQ: HEV), Ultralife Corp. (NASDAQ: ULBI), China BAK Battery, Inc. (NASDAQ: CBAK), and Valence Technology Inc. (NASDAQ: VLNC).

This Lithium ETF from Global X is expected to launch on Friday, July 23, 2010 and will trade under the “LIT” ticker on the New York Stock Exchange. These are not all of the names, but these are the names of stocks that actively trade in the U.S. which are components in the ETF. We have included the initial weighting in the proposed ETF, although that will change through time. Weightings will be as follows:

Chemical & Mining Co. of Chile Inc. (NYSE: SQM) 20.00%
FMC Corp. (NYSE: FMC) 17.24%
Rockwood Holdings Inc. (NYSE: ROC) 7.25%
A123 Systems, Inc. (NASDAQ: AONE) 4.75%
Exide Technologies (NASDAQ: XIDE) 4.75%
Advanced Battery Technologies, Inc. (NASDAQ: ABAT) 4.75%
Ener1, Inc. (NASDAQ: HEV) 4.75%
Ultralife Corp. (NASDAQ: ULBI) 2.92%
China BAK Battery, Inc. (NASDAQ: CBAK) 2.81%
Valence Technology Inc. (NASDAQ: VLNC) 2.22%

The Solactive Global Lithium Index tracks the price movements in shares of the largest and most liquid companies whose main business operations are in exploration and/or mining of Lithium or a closely related activity or production of Lithium batteries. The index is calculated as a total return index in USD and adjusted semi-annually. As it adjusts semiannually, so will the weighting of its components.

An inquiry into the company notes that the official launch will be the same seed capital as all Global X ETF products, which is 100,000 shares at a launch price of $15.00. With the sector being difficult to invest in and with the actively traded U.S.-listed stocks (some are foreign ADRs) above having an initial weighting of more than 70%, it seems likely that investors will have far more interest than an initial size of 100,000 shares.

JON C. OGG

Filed under: ADR, Alternative Energy, Commodities, ETF, Index, Metals Tagged: ABAT, AONE, CBAK, FMC, HEV, LIT, ROC, SQM, ULBI, VLNC, XIDE

Top Pre-Market Downgrades (AMSF, SQM, TRI, TSCO, WOOF, VOLVY)

247wallst — Wed, 07 Jan 2009 07:44:55 +0000

There were not as many analysts calls today, and you will see that the upgrades and downgrades from Wall Street analysts are just not as robust as some might have expected. Here are this Wednesday’s early bird downgrades:

Amerisafe (NASDAQ: AMSF) Cut to Perform at Oppenheimer.
Sociedad Quimica (NYSE: SQM) Cut to Neutral at JPMorgan.
Thomson Reuters (NYSE: TRI) Cut To Sector Perform By Scotia
Tractor Supply (NASDAQ: TSCO) Cut to Neutral at Piper Jaffray.
VCA Antech (NASDAQ: WOOF) Cut to Market Perform at Morgan Keegan.
Volvo (NASDAQ: VOLVY) Cut to Sell at UBS.

Jon C. Ogg
January 7, 2009

Posted in Analyst Calls Tagged: AMSF, SQM, TRI, TSCO, VOLVY, WOOF

Top Pre-Market Analyst Upgrades (BKS, HNI, LEAP, LGF, SAFM, SQM, SYNA, VIP)

247wallst — Fri, 05 Dec 2008 07:38:22 +0000

These are the top pre-market analyst upgrades and positive calls we have seen so far this Friday morning:

Burger King (BKC) Started as Buy at Citigroup.
HNI Corp. (HNI) Raised to Neutral at Goldman Sachs.
Leap Wireless (LEAP) Raised to Buy at Goldman Sachs.
Lionsgate Entertainment (LGF) Started as Overweight at Morgan Stanley.
Sanderson Farms (SAFM) Raised to Overweight at JPMorgan.
Sociedad Quimica (SQM) Started as Overweight at JPMorgan.
Synaptics (SYNA) Started as Overweight at JPMorgan.
Vimpelcom (VIP) Raised to Buy at Citigroup.

Jon C. Ogg
December 5, 2008

Posted in Analyst Calls Tagged: BKS, HNI, LEAP, LGF, SAFM, SQM, SYNA, VIP

Cramer’s “Wild Bull Market Stock Picks”

247wallst — Tue, 29 May 2007 17:28:13 +0000

Stock Tickers: DE, MON, SQM, CAT, TEX, MTW, FWLT, MDR, JEC, BA, UTX

Cramer tonight discussed where the wild bull markets are that you want to be in. He has six bull markets.

1) Agriculture: the subsidies bring in $55 Billion in revenues to large farm companies alone. His 3 picks in this are Deere (DE), Monsanto (MON), and Sociedad QM (SQM).

2) Machinery: his pick is Caterpillar (CAT); Cramer also likes Terex (TEX) and likes Manitowoc (MTW), but he said CAT’s the best of breed pick and that’s the one he wants.

3) Infrastructure, perhaps the most wild bull market: the two cheapest after the big runs are Foster-Wheeler (FWLT) and McDermott (MDR), both of which he has been behind for large runs. All the asbestos issues are behind the companies and they are very undercovered on Wall Street. Jacobs Engineering (JEC) is the runner up.

4) Aerospace: Cramer’s pick is Boeing (BA) as it should be up more than it is, particularly after Airbus woes. He said he likes United Tech (UTX) but the best is Boeing and Boeing is now going north of $100.00.

Jon C. Ogg
May 29, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.