Saturday, August 4, 2007

First Solar Inc.

First Solar Inc. is a NASDAQ listed security that has been trading in a range between $23.50 and $123.21 over the past year. With 72,997,930 shares outstanding, a recent price of $107.50 gives a total market capitalization of $7,507,836,989. While there are certainly larger companies, First Solar Inc. has definitely earned its place in the pack. Last year, First Solar Inc. created $0.83 in earnings for every share outstanding.

First Solar Inc. is currently priced by the market at 129.00 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price over $50 a share and earnings per share below $1 a share, First Solar Inc. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.