Bought Trina Solar (TSL) and Wrote Dec 50 Calls On Suntech (STP) Shares

We bought Trina Solar (TSL) at $45.61 yesterday. The stock rallied about 40% following Trina’s abandoned of plans to build polysilicon production plant – cost concerns and other uncertainties surrounding this plan had pushed the shares way down in early March. Q1 earnings came in a little light on Thursday although they beat analyst estimates by three cents. This resulted in a sell-off yesterday morning. The forward price-to-earnings ratio is in the low teens still and Trina continues to be one of the lowest valued integrated solar manufacturers.

We wrote Dec 50 covered calls (STPLJ) on our Suntech (STP) shares at $5.20 yesterday. The options are set to expire in 6 months and if they get exercised we will realize an overall return of over 50%. This reflects our expectation that Suntech has limited upside potential.

Below is our updated portfolio:

Stock	Buy Date	Buy Price	Current Price	Current % Of Portfolio	Unrealized % Return	Yield as % of BOY Portfolio Value Plus Deposits
Altria (MO)	Various	16.69	21.53	3.38	29.04	0.16
Philip Morris International (PM)	1/4/2005	32.19	50.50	5.29	56.87	0.18
Kraft Foods (KFT)	Various	24.03	31.22	3.27	29.90	0.11
Plum Creek Timber (PCL)	5/12/2005	35.5	46.08	7.23	29.79	0.28
Pfizer (PFE)	Various	24.37	17.96	4.70	(26.30)	0.29
ICICI Bank (IBN)	5/18/2006	27.57	35.45	5.56	28.57	0.06
Taiwan Semi (TSM)	7/27/2006	8.71	11.65	6.09	33.90	0.19
Advantage Energy Fund (AAV)	11/2/2006	11.22	13.14	4.47	17.07	0.51
SunTech Power (STP) Call Value	3/14/2007	36.73	40.24	4.21	9.57	None
Central Europe & Russia Fund (CEE)	Various	51.03	55.90	5.85	9.54	1.14
Patni Computers (PTI)	8/10/2007	20.85	12.80	3.35	(38.66)	0.04
Itron Inc. (ITRI)	11/07/2007	85.01	97.09	5.08	14.08	None
Anthracite (AHR)	11/09/2007	7.97	9.27	4.85	16.31	0.72
ClickSoftware (CKSW)	11/09/2007	4.61	2.95	1.54	(36.03)	None
Harvest Energy (HTE)	11/28/2007	21.01	24.56	5.14	16.87	0.79
iRobot (IRBT)	12/18/2007	18.65	13.47	2.82	(27.16)	None
MCG Capital (MCGC)	Various	10.86	5.17	2.16	(52.40)	0.37
LDK Solar (LDK)	01/22/2008	30.49	42.12	6.61	38.13	None
Aegon N.V. (AEG)	04/28/2008	15.99	14.31	4.49	(10.49)	0.26
LM Ericsson (ERIC) (AEG)	05/05/2008	23.65	25.19	5.27	6.49	0.18
TD Ameritrade (AMTD)	05/21/2008	17.68	18.10	3.79	2.35	None
Trina Solar (TSL)	06/06/2008	45.61	45.00	4.71	(1.34)	None
Cash				0.18
Total Portfolio					5.26	5.27

• For SunTech Power (STP), we wrote covered calls for 2008 Dec 50 on 06/06/2008 at $5.20.
• For Taiwan Semi (TSM), we wrote covered calls for 2008 October 12.5 on 4/21/2008 at $0.45.
• For Altria and Philip Morris International, assumed spin-off ratio of 30.83:69.17. Altria is yet to supply the cost-basis info
• For Plum Creek Timber (PCL), we wrote covered calls for 2008 November 50 on 06/03/2008 at $1.70.

Related Posts:

1. Suntech (STP) analysis – 09/07.
2. LDK Solar (LDK) analysis – 03/08.
3. Comparison of Vertically integrated solar manufacturers (CSIQ, TSL, YGE, STP) – 11/07.