TraderMark - This Week's Performance will be tied to Trina Solar (TSL)

Our current #1 position reports tomorrow AM; usually my methodology is to cut back on all positions ahead of earnings but due to the severe undervaluation in this name, I am keeping my entire stake going into the cattle call tomorrow. I'm not sure if this quarter will be "the one" or it will happen next quarter, but the current $3.14 EPS 2008 analyst estimate I find to be completely beatable, in fact by a large margin. I am hoping guidance tomorrow better reflects that. But even at the "$3.14" we have a forward P/E ratio of under 15 for a company growing well over 100% this year, and should be able to grow >50% for the next few years. At the $4.00 or so I believe it can achieve this year in EPS its trading under 12.

Most peers trade at forward P/e ratio in the mid to upper 20s. So if you throw my $4.00 2008 estimate and give it a peer valuation you see where I am going with this one... and why I am not cutting back although we just never know how the lemmings will react tomorrow. Frankly I could make a very valid arguement that Trina should be valued higher than some of its peer group due to its integrated business model and potentially superior gross margins. The only fly in the ointment would be any sort of equity offering as almost every company in the sector has done in their short public life - Trina Solar has yet to do one, so they are overdue. But their cash flow is such they might not need to do one at all.

Either way with such an overweight on one position our performance for the week will definitely be determined by tomorrow's action in Trina.

Long Trina Solar in fund and personal account



Source: http://www.fundmymutualfund.com/2008/06/this-weeks-performance-will-be-tied-to.html