Friday, February 26, 2010

Is Brigantine Advisors Analyst Ramesh Misra (PhD.) the Dumbest Guy on the Street? (CREE; FSLR)

For what it's worth, the fact that I'm posting this probably indicates that FSLR is due for an uptick and CREE a down. Karma and all that.
Plus First Solar has the largest percentage short interest of any stock in the S&P 500, so an up-move could be pretty dramatic.

On January 19 Mr. Mishra went bearish on CREE with earnings due after the close. The stock closed at $54.21. Cree reported, we posted "Cree Crushes Street Estimates; Stock Leaps (CREE)" (lots o'links) and the next day the stock closed at $63.59, up 17.30%.

Eric Savitz reported the call at Tech Trader Daily in "Cree: Brigantine Cuts To Sell Ahead Of Earnings Tonight" with the lead sentence:

Well, here’s a nervy call....

Although we saw the TTD post we chose not to link to it, it made no sense.

Two days later, we posted "Is Cree, Inc. (CREE) Likely to Burn Out?", linking to a piece by Tom Konrad at AltEnergyStocks, "Pioneering light-emitting diode (LED) maker Cree Inc. looks overvalued".
I commented on Tom's propensity to be early and mentioned Mishra:
...That said, he [Tom -ed] is a very good stock-picker and knows his stuff, the PhD notwithstanding. Here's what he wrote three days ago. We sat on it to get through the earnings report (just as we sat on the Tech Trader Daily post "Cree: Brigantine Cuts To Sell Ahead Of Earnings Tonight").

In the case of the Brigantine analyst we figured he had flipped a coin in an attempt to get some publicity, something that is contrary to any reading of fiduciary law and philosophy that I've ever seen.
In Tom's case I just figured he was early. The stock was up almost 17% yesterday....
Despite the gyrations in the market over the last five weeks CREE closed Thursday at $66.96, up 23.51% since Mr. Mishra said sell it.

On February 18 First Solar was due to report their earnings after the close and, you guessed it, heeeeer's Mishra. I posted "First Solar: Brigantine Upgrades Ahead Of Earnings (FSLR) Options 'Max Pain' at $120" with this comment:
Remember, the company has a two year string of earnings beats that have fed into the "buy on mystery, sell on history" price pattern for the stock. With options expiring tomorrow the maximum pain is at the $120 strike price.*...
The stock was at $125.66 as I wrote that. It closed at $126.29.
The company reported and I posted "First Solar Reports Utility-type Earnings Growth, Stock Drops (FSLR)". The next day the stock closed at $116.00 down 8.14%

Ya gotta ask yourself "Who is this guy?" Here's his Brigantine bio.

It's not like this stuff is rocket surgery. Your humble blogger managed to post "First Solar Earnings: "Trading the Main Event" (FSLR)" two days before the earnings release:
First solar will be reporting their fourth quarter and year end after the close on Thursday February 18.
The only surprises I can envision would be negative. The December 16th 2010 outlook conference call was the high water mark. No one was impressed. The stock had an intraday high of $142.66 the day before and made a double top on January 7, trading as high $142.46.

We actually know something about this name...
Followed by, "Solar Stocks Lift On Latest Twist In German Subsidy Saga" (FSLR)", a few hours later (and a couple points higher) :
The Grassy Knoll Theory of Investing posits that "There is a They; and They Know".

I sure felt like that this morning; put out a mildly negative piece on First Solar's upcoming earnings and watch the stock jump seven percent.

The stock has a pattern of running up into earnings and then trailing off.

The better to short you my dear....
Here's a Climateer Investing headline post-mortem:
Feb. 19
ThinkEquity, Merriman Curhan Ford Downgrade First Solar, Wedbush Lowers Price Target. Plus the Earnings Call Transcript (FSLR)
Feb. 19
"UBS Cuts First Solar to Neutral; Has Had a Buy Rating on the Stock Since Dec. '07" "Cowen's Stone Comments on First Solar Results" (FSLR)
Feb. 19
BARRON'S TAKE: "Don't Get Burned by First Solar-The stock may continue to fall as Thursday's earnings report does little to quell concerns..." (FSLR)
Feb. 22
"Solar Shrs Swoon; Barclays Cuts Ratings; Sees Trouble In 2011" (FSLR; SPWRA; SPWRB; STP: TSL)
Feb. 23
First Solar:" Wunderlich Launches With Sell Rating, $90 Target" (FSLR)
Feb. 23
Options Flash "First Solar Burns Out; Bears Taste Blood" (FSLR)
Feb. 23
More Bad News for First Solar (FSLR)

Topped off by yesterday's
"First Solar Chairman Bails on More Stock, Bringing Total Insider Sales to $2,394,069,745 Since Nov. '06 IPO (FSLR)"
FSLR closed Thursday at $102.97.
Here's the hourly price action (via BigCharts) since Ramesh made his upgrade, you'll note that the stock broke 100 on Thursday, a new fifty-two week low, one week since the pontification:

$126.29 to $98.71. Down $27.58 at yesterday's low, a loss of 21.83%.
Calls don't get any worse than his.