Markets that are considered new and innovative are some of the better – but more risky – investments to become involved with. Getting involved at the correct time is the trick. The stars need to align and the economy needs to cooperate. Finding a company that has all its “ducks in a row” to become a significant player in that new and developing market is the work that needs to be done. An investor that can find such a company is an investor that is ready to enjoy significant profits as the new technology – and well-run company – takes advantage of what the market has to offer.
GT Solar International Inc., a solar equipment manufacturing company, works to offer all manner of equipment required to manufacture solar photovoltaic cells and associated elements. The company has just completed an IPO this past Wednesday with solid but ill-timed results (offered mid-range at $16.50, close Thurs $14.59, $500 million raised) – as it coincided with a significant drop in the price of oil and general drop in economic indicators.
Regardless of the company’s IPO, GT Solar is in a solid position as it works through a backlog of orders, currently valued at $1.3 billion, and a positive sales environment on all fronts. Generally, most solar equipment manufacturers are seeing such backlogs from around the world and are working to keep pace in an evolving marketplace. Solar in general, however, does need to compete with other concerns facing the overall economy found globally. From this standpoint, timing is everything. GT Solar does appear to have the timing down regardless of economic conditions and is moving forward nicely. Solar power equipment will be part of the world’s future energy solution, with essential equipment for all aspects of solar being required regardless of the penetration that is made into renewable energy markets. How the company develops, as technology advances, is the key element to its overall success.
From a strictly investment standpoint, the less then favorable IPO market of the day has helped GT Solar in several ways. The leading positive from today’s IPO market that helped GT Solar was the general lack of IPO’s taking place. In the solar marketplace, the last significant IPO was First Solar – a company now trading in parabolic terms. The company’s offering, coming on the heels of First Solar’s 2006 offering, surely cannot hurt the company’s chances for a nice run-up in the near future. GT Solar does appear to be striving for leading market-maker status in the solar field and may just be able to reach that level sooner rather than later.
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