SunPower, Not First Solar, Is Best Positioned to Succeed Internationally

SunPower already has a strong toehold in high-growth emerging markets, and it's gaining momentum.

Apr 30, 2014 at 5:32PM

In March, First Solar (NASDAQ:FSLR) shares jumped more than 20% in a single day in reaction to guidance issued during its analyst meeting. One of the major drivers was the company's initiative to expand its international presence. 

That makes a lot of sense, as nearly 85% of First Solar's 2013 revenue was generated domestically. And high-growth, high-margin markets such as Japan, projected to be the world's No. 2 solar market in 2014, offer real opportunity. 

But First Solar will be playing catch-up in markets like Japan and China, where SunPower (NASDAQ:SPWR) already has a presence. 

Established global presence
In 2013, SunPower generated more than 15% of its revenue from the high-growth Asia-Pacific (APAC) region, nearly doubling that region's share just two years prior. 

Spwr Revenue And Gm By Geography

Data from 2013 SunPower annual report. 

What's more, APAC generates consistently strong gross margins for SunPower. So, if trends hold, this region will continue to bolster the company's gross margin that has already returned to 2010 levels. 

And Q1 2014 numbers suggest SunPower may still be building momentum here: The region accounted for nearly 22% of the company's first-quarter shipments. Much of the growth, particularly in Japan, has come from the residential (or rooftop) market, where SunPower's high efficiency panels are a natural fit in space-constrained settings. 

China, finally
Perhaps more importantly, SunPower announced that it executed an agreement to supply 70 megawatts for projects in Inner Mongolia (with plans to supply up to 120 MW). This signals an important toehold in the Chinese market that other North American and European companies have so far failed to gain, due largely to protectionist measures aimed at strengthening China's own domestic solar companies.

Finally, SunPower has pointed to strengthening in its Europe-Middle East-Africa (EMEA) business, which has long represented a significant chunk of revenue. If the European market in particular continues to strengthen, SunPower will be well positioned in the world's top three non-U.S. markets (China, Japan, Europe). That bodes well for SunPower, which is already well positioned in the U.S., projected to be the No. 3 overall market in 2014.  

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Brandon Workman has a long position in SunPower. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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