No. of Recommendations: 2
Hi everyone,

http://finance.yahoo.com/news/abb-acquire-power-one-become-0...

ABB is buying Power-One for $6.35 a share in cash. The deal is expected to close in the second half of the year.

The $1.028 billion price tag is not quite 3.9-times enterprise value and is only roughly 17-times trailing free cash flow. It's not even 8-times EBITDA.

It's a good fit for ABB, which I knew was getting into and expanding in the inverter space. And the other business line fits them, too. But it's a bad outcome for Power-One shareholders, especially with shares of the stock as high as $6.50 just a few months ago and topping $9 in mid 2011.

The MUE port will eke out a small profit. Average cost basis is $6.19 per share and the selling price is $6.35, so I make $0.16 in gains.

Of course, I had much higher hopes for this company and its stock, but it's not to be.

Cheers,
Jim
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No. of Recommendations: 0
Hi Jim-
Let's use the baseball metaphor...you swing for the fences; strike out a few, hit some singles and doubles, a triple once in a while, and the occasional homerun.

I guess that would make PWER a walk for the MUE? Your outstanding discipline at the plate has saved you. I hope your minions are paying attention to that...average cost of $6.19.

As with ZIP and others, the mergers and acquisitions that us little people dream of too often serve to lock in losses. Kinda stinks and a good lesson reiterated. This acquisition is going to be great for ABB, stupendous for PWER insiders, and something between "meh" and "ouch again!" for the people who supposedly own the company.

End of rant, but keep swingin', Jim!

-Randy
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Thanks for the encouraging words, Randy. Now I need to find a place for the cash I'll be getting back.

Cheers,
Jim
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I am glad I held this long to get this last bit of a boost. Exiting with a 25% loss due to my selling $10 puts.

Anurag
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Here's the sell article: http://www.fool.com/specials/realmoneyports/real-money-portf... I'll be selling the shares tomorrow. (TMF rules require one full trading day between publication and action and, with the article published late last night, that means Wednesday is the earliest I can execute the trade.) Then I'll sell my own shares (but at a loss, unfortunately).

Interestingly, while doing some digging around while writing the article yesterday, found that there is now some belief that grid parity will be reached sooner rather than later for solar energy, which means government subsidies won't be needed. Maybe as early as 2014. http://www.pv-magazine.com/news/details/beitrag/deutsche-ban...

With double-digit growth of solar power expected in the Americas and Asia, ABB is getting a good deal from Power-One. I'd like to stay invested in this space, but maybe a basket of several stocks will be the way to go. Have to do some investigating and see what comes up.

Cheers,
Jim
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Whoops, wrong link. Here's the right one: http://www.fool.com/investing/general/2013/04/29/i-wasnt-the...

Jim
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No. of Recommendations: 1
I've followed FSLR for eons...giving it a thumbs down when it was stupid expensive (in the 250's) and almost grabbing a real-life falling knife last year (near $100 share price). I am pretty sure I see the macro reason for the crazy share pricing throughout the sector and it can be summed up in one word: China.

China has been super-subsidizing their solar industry. Now they (say they) aren't going to anymore. When China really kicked up the subsidies in about 2009, FSLR took it on the chin. Solyndra may well have been a victim, and you probably know others. If China is indeed going to stop propping up their home-grown money losers, that is FSLR's gain. They can (and will) price for profitability again. Trina is moving up in tandem with FSLR, but Trina is a fool's bet IMO. FSLR has generated real cash all along...they are now unleashed...or at least probably unleashed. There may be other US or non-Chinese companies similarly positioned. I'd look there.

No backsies, China!!
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