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Subject:  my EOY synopsis of RSOL Date:  12/31/2013  8:23 PM
Author:  tktrimbath Number:  19 of 28

INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

Real Goods Solar
RSOL (market cap was $0.068B is $0.110B)
Real Goods Solar has a long history in the renewable energy market. For a while it backed away from retail and DIY, and concentrated on construction services by helping install solar power systems on municipal and business buildings, primarily in states that provided subsidies. Recently it returned to a bit of its roots by re-establishing its online catalog for the retail and DIY markets. The market growth is encouraging as the need and demand for renewable energy and decentralized power increases.

RSOL trades at multiples that are more like construction companies, which was possibly appropriate, though there is a suggestion that a premium is reasonable considering that some of its competitors are trading at much higher multiples (SCTY's Price to Sales ~ 34 versus RSOL's Price to Sales ~ 1). I wouldn't mind RSOL having such a premium, but while I don't expect it, I do suspect something between the two extremes is more appropriate. I think the solar industry was held back a bit by the Solyndra story of a year or so ago; and weak revenue growth may also explain the lack of a premium to RSOL's price. But, SCTY's revenue growth is much higher than RSOL's, which actually dipped for a while. If SCTY is evidence that the market and industry are growing, and RSOL has not able to experience that growth yet, then one possibility is RSOL is merely witnessing a lag, and another possibility is that RSOL must address some fundamental strategic issues of which I am not aware.

DISCLOSURE LTBH since the mid-2008 IPO. I might sell some for diversification; because, as undervalued as RSOL may be, many other small stocks appear to be even more undervalued. (Check my blog for my other holdings.)
(I've also collected links to the other discussion boards and my other stocks over on my blog
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