Debunking Canadian Solar Stock - A STRONG BUY! (NASDAQ: CSIQ)

[@RafitoMembroza]

Really good due diligence, Sven. I love stock reviews like this where you focus on risks when everyone else superficially gives a BUY rating and that’s it

[@philippusparacelsus4136]

Good old Sven is back!

[@Value-Investing]

:-)

[@patrickzingg8657]

Exactly my opinion as well. Quality stuff like that is why I joined the chanel!

[@roberttaylor3594]

You had me at “No dividend”.

[@Value-Investing]

:-) show me the money!

[@JCTEAM60]

Risk: What happens when governments stop subsidizing solar? Will consumers (corporate and residential) still find value in the investment?

[@GGalde]

Only depends on the price of the oil.

[@gregorsimon9337]

Then China wins.

[@loungelizard836]

Oil is still subsidized, $8T worldwide. Of course solar hasn't captured government, so the risk is still there. OTOH, commercial solar is profitable now (utility scale).

[@bogdancimpoiasu]

I have been reading about CSIQ in the past 2 weeks, but still didn't learn as much as I did from this video! Thank you, Sven! Maybe the risc of being taken private is smaller now, since Lauren Templeton is a member of the board since 2020?

[@Camille_Boomer77000]

It's awesome you covered this company. I have had it on my watchlist for some time but never invested in it. There has been that thing I could pin point that was making me hesitate and I'm glad you brought clarity.

[@SR1XM]

Professor sven you know how the game is played I've watched so many of your educational videos and no one on you tube comes close

[@ValueHurts]

The big issue with Solar is that we are likely to be in a completely different environment to the last 30 years. Higher interest rates and higher commodity prices. Solar has very low return on energy invested. It uses a vast amount of cheap coal power in China to produce these panels. In a fairly dark place like Northern Europe or Canada the amount of energy produced is actually lower than the amount used to initially create the panels with all the mining and fabrication. Things can change dramatically with these long cycles.

[@patrickboyer4688]

HI Sven, great review. Always love an alternative perspective and finding valuable information. As a share holder of CSIQ, I didn't know about the take private moment. Something to consider and look into.

[@pdfg165]

Great forensic analysis. Thank you, Dr. Carlin.

[@paouvous]

Sven Congrats for hitting this spot on and in detail! Always remember that if something is too good to be true, usually it IS too good to actually be true

[@drstedman]

I owned CSIQ off and on for a lot of years, trading a range. I got out at 28 in 2020, and I don't think I'll get back in. I held through Qu's buyout offer, which hung around in unrejected limbo for far too long, holding the stock price down during a period when the sector was booming. I know their product well, and the company's financials seem ever solid on the back of real sales revenue, but there was fishy action from management, which is obviously dominated by one man, throughout.

[@rainerwahnsinn2150]

As you know the product: How does it compare to their competitors? Lets say I want some solar on my roof, why would I go with their panels instead of others?

[@BuildertheButcher]

Great video! How about your old favourite Scatec Solar in compare? Seems cheap as well.

[@StolenPudding]

Hi Sven. Could you have a look on Latin America commodity stocks? Brazilian Petrobras ($PBR & $PBR.A) and Colombian Ecopetrol ($EC) seem to be extremely undervalued. PE ratio around 3 with 20% dividend.

[@elrevesyelderecho]

11:30 it sounds like a classic money laundry - Latin American briefcase company where the family is avoiding government regulations extracting all to US, Panama or Bahamas bank account.

[@Value-Investing]

we don't know, but...

[@stefand5472]

They are pretty Asset heavy and have meager Returns on capital

[@brilleslang1e]

I own some very cheap oil stocks. But canadian solar, it is the best risk reward buy i have ever seen. Sure has risks. Biggest one is the china relation to western world. 10-100 bagger potential. Only in the last 5 years did solar become competitive with coal energy. Solar with different battery solutions or hydrogen generation will be the key to going to net zero for most of the worlds population, during the next 50 years. Everything south of the middle line in europe and US. Includes most of asia, afrika and south america. No divident because the are investing everything in growth.

[@leestringer]

Sven Carlin, master investor...AND THE KING OF CAPSLOCK!!!!!!!!!!!!!

[@kaitlyncranwick]

As a soon-to-be retiree, keeping my 401k on track after a bumpy 2022 is a high goal. I've read about investors generating up to $250k ROI in this present sinking market; any suggestions for increasing my ROI before retirement would be greatly appreciated.

[@SherlyDavis-ek4qz]

Yes, you are right. it's been a brisk tailwind for lnvestors in US stocks over the decades but it is still a delicate season now, so I advise you to consider the guidance of a financiaI advisor.

[@maggysterling33254]

A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.

[@StellaMaris-lv2uq]

@@maggysterling33254 Please can you leave the info of your lnvestment advsor here? I’m in dire need for one.

[@KaitlynMiller-mv8qx]

@@maggysterling33254 Please can you leave the info of your investment advisor here? I’m in dire need for one.

[@JulieAnn-hn6rt]

@@maggysterling33254 Please can you leave the info of your investment advisor here? I’m in dire need for one.

[@Time2Pretend90]

Love this video! I had this on my shortlist but I felt like I was missing something why people have no trust in this company so I was planning to look deeper in this myself. Feel like you covered quite a lot of ground already. What do you think about the more reputable solar stocks like ENPH? Are they getting into interesting territory for you or do you want more clarity on earnings and a lower price first?

[@k4ir0s]

Good day Sven, Munger recently advocated for home builders, and Buffett bought a few. I think a video on the sector would be interesting? :-) Personally, TOL is my top pick in that sector. Would love to hear your thoughts on buying home builders now, especially with lumber prices down. I'm passing on CSIQ because not enough value given back to shareholders, and a low ROIC. Growth is nice though.

[@nonexistent5030]

If you look at the capital management of the company it is looking to be trending in a very positive direction that is shareholder friendly. IPOing the Chinese business and reinvesting that capital in American manufacturing plants will reduce the company's exposure to tariff risks. Additionally, as a company that is in the top 5 globally but still significantly smaller in scale than competitors in China, I think it makes sense to reinvest in growth rather than distribute capital to shareholders. The only real concern would be the risk of takeover at lower prices. From a Mohnish Pabrai perspective, it definitely has the asymmetry of massive upside potential with little downside risk and so then it becomes a question of position sizing.

[@nonexistent5030]

I think if you look at the IPO of the CSI subsidiary and how that's the largest driver of the business which CSIQ owners now only own 62% of, it makes sense how "cheap" this stock appears. If we take away the 38% of ownership in that subsidiary that we IPO'd, take away the 20% of ownership in Recurrent Energy we are giving to Blackrock to fund growth, then assume 9% growth in revenues (after a reversion to the mean given an impending downturn) at 6% FCF margins (has been achieved previously and is consistent with median EBIT margins), the company is worth about $35/share given current assets and total liabilities with 69 mil shares outstanding. Definitely a margin of safety here but this one is a complicated analysis for sure. No wonder the market over reaction, especially with China involved. Looks like they're near achieving immunity from the tariffs though using the IPO funds to finance localized manufacturing. Gotta hand it to management on this one. Both equity financing achievements have been accretive to share holders rather than dilutive. Together they value the company at $57/share. Which is what my DCF model assumes prior to "dilution" and yet the investing public has only valued them at 55$ and that was 3 years ago.

[@Value-Investing]

thanks for sharing!

[@angelovelloni9931]

Sven buon pomeriggio, cosa ne pensi delle valutazioni odierne ? Di CSIQ... grazie per la risposta !

[@lettuceforbuns]

Stumbled across this late but curious given CSIQ stock price. Any insight on the contributions of Recurrent Energy or the new manufacturing facilities in North America? Thank you for the excellent videos!

[@Value-Investing]

anything can happen, but all in all it is a difficult business

[@lettuceforbuns]

@@Value-Investing appreciate the response. thank you for your insights!

[@framedaglia5709]

What do you think about gurufocus and his valuations?

[@Value-Investing]

I don't think about it :-(

[@holzchopf8471]

what about solar edge?

[@phvaessen]

excellent ! based on the revenue/income/cash flow history and analyst forecast this one looks great. I was wondering why, with such great history the stock was not raising earlier instead of remaining flat (or cyclical). You just gave an interesting answer : look behind the figures, dig deeper in the annual report and do your due diligence !

[@Duuj1]

Hi Sven, thank you for taking the time to analyze this company. Before watching your video I stopped and took a quick look at the company. I noticed that the net profit is only 5 - 6% ... Isn't this very low ?

[@Value-Investing]

That depends on the business, but yes, thin margins here, thus volatile!

[@igorvalle6050]

I have also suggested it on the platform. Happy you choose to analyze it

[@FrängischeVerkostungsFrond]

Hi Sven, >40% down since this video. But have the fundamentals changed??

[@xxGecko22xx]

What do you think about CSIQ vs. ENPH? I feel like the latter has more brand recognition

[@snanurag]

Really deep analysis. Sven, have you checked Jinko Solar? It is really cheap now. I tried to dig it up but did not find any flaw in the company. Can you please provide some inside on it please?

[@JENSHORN]

Hi Sven, is it time to look at this again ?

[@fregger74]

have you looked at enphase? also in the solar space and cheap, but a much better company

[@ttsen9598]

Great video Sven! Thank you! Can you do an airline please? LUV or DAL or JBLU?

[@maximkolomiets4130]

The only problem with "Canadian" 🇨🇦 solar is that its actually "Chinese" 🇨🇳

[@Value-Investing]

:-)

[@explorerjlc1743]

a lot of money could be made from this, but with the risks here, I wouldn't be touching it.... rather buy BABA

[@rafaelarelin7778]

When it comes to analysis of businesses, Sven you are the goat

[@arnaldobarthes6331]

Do you have plataform in mozambique?

[@robertdagge200]

My Blackrock Oil and Gas converted into a Renewables fund when oil was at a bottom and renewables at a peak (ie worst possible "exchange"rate). Since then, O&G stocks up 3x+ and renewables in the gutter. BR cost me a fortune.....Renewables have been a terrible investment.

[@GGalde]

Demand of solar panels will depend on the oil barrel price, which will be high in the foreseeable future. + $JKS (Jinkosolar) is really similar to Canadiansolar, but has a nice dividend. I think Jinkosolar would have been a better pick for today’s video. Or compare both. Or say a few words about jinko at least 😢

[@Value-Investing]

Well, if you can predict oil, isnt it much easier to make money there :-)

[@GGalde]

🤔 indeed

[@kasparskokins963]

Grantham Mayo Van Otterloo Holdings did sell 46% of holdings, why?

[@alexandruolaru7855]

Yeah Balance Sheet looks very impressive with BV/MC= 1.5, but gosh operating margins at 5% this looks more like a retailer, looked at some of the competitors all of them have margins in low single digits. Need to do a deeper dive mabe there is some potential there.

[@Cama5555]

Hello Sven What do you use to do your videos?

[@jeroen7356]

Great review! What are your thoughts on Enphase?

[@joaovitorino662]

Specially in Canada, solar will never be profitable unless heavily subsidized. Not hating, simply stating a fact. Even then you will only piggyback on nuclear and natural gas - the only sources dense enough to provide reliable energy.

[@jamestk656]

A relative on the management team? Deal breaker red flag to me. I've seen enough companies with the red flag of the CEO hiring relatives and subsequently tanking the company. The rest of Sven's great due diligence are just more nails in the coffin.

[@angelsancheese]

They also have high positive cash flow from Financing which is bad right?

[@linusjacobsson2419]

Value and education at its finest. Cheers!

[@Value-Investing]

thanks!

[@idontnowachannelname]

what about solar edge? you think they are in a similar situation?

[@Value-Investing]

have to check!

[@mariusbagd]

What is happening with Rubis stock? Why the price is going down?

[@Value-Investing]

Stock prices go up and down:-) but will update soon!

[@69Bones]

Really like this type of video my favorite one of your videos was the one RH. Thanks for your videos

[@elenakhotyuk9789]

Thank you very much Dr. Carlin💖

[@GordonGekko98]

I could see massive cuts from governments investing in solar. It’s down 50% but could drop another 50% if revenue drops in the downturn. Could be a good buy if that happens

[@jimhueston9731]

Thanks Sven. That was an excellent “Beyond the numbers” analysis!

[@roelandreijtenbagh5196]

Hi Sven, could you make a video about american express with a attractive pe of 14 it might be a good buy. This company is very intersting with wealthy customers and higher swipe fees. Maybe you could analyze where the future growth will come from and if it might lose against visa and mastercard etc

[@truncksZR]

Is it better then Enphase?

[@danunpronounceable8559]

I was considering buying into this business, but to be honest i just felt there was something off about it. Glad to know my suspicions were valid

[@erikm9768]

What suspicion is valid?

[@danunpronounceable8559]

​@@erikm9768shady management.

[@sa8lvi]

Have a look at enphase

[@shares-qg9kw]

davita dvr stock ? what do u think Sven? seen on everything money

[@SAVORYTV1]

What is your recommendation now?

[@Value-Investing]

don't know if a price drop changes much

[@jhghjghj1]

Surprised that you didn't mention 4b of debt on 2b of equity and mostly negative free cash-flows (positive FCF only 2 out of last 7 years)

[@TheBooban]

ok, debt is important. But I think this is in the form of corp bonds years ago at low interest rates to build these power plants. After 5 years, it starts making money, this seems pretty good. No?

[@happyend9840]

All utilities have debts 😂

[@mr.sandman2811]

same, check DQ its CISQ brother but better valuation and insane arbitrage. "you looked at CISQ, but look at DQ (nyse) daqo new energy, it is the same story 11bn $ mkt cap on shanghai listed shares (which are owned 75% by DQ NYSE) yet 1.8bn $ mkt cap nyse listing for DQ. They are buying back a lot of shares, shares should drop from 75 mn to 67 in 3 months/ next quarter. P/b of 0.4, !!SVEN it has 3bn $ in cash and equivalents, with quick ratio of 5.6 when mkt cap is 1.8bn $ !!"

[@dajo8403]

You are the best in your field! Big thank you!

[@jamesmf968]

Solar energy looks really cheap right now. Good companies like SEDG and ENPH are trading at P/E 20. I made a lot on these companies by buying in 2018 and selling in 2021 - looks like it might be time to buy again!

[@Value-Investing]

thanks for sharing!

[@Zanzabar5]

What's up with Rubis? I's down big.

[@brunoradovanovic2408]

Nothing. Interest rates effect only. Time to buy

[@SameerKhan-gv8mt]

Sven, please cover $DQ stock. Would love to hear your point of view. Very interesting valuation. Thanks!

[@mr.sandman2811]

same, check DQ its CISQ brother but better valuation and insane arbitrage. "you looked at CISQ, but look at DQ (nyse) daqo new energy, it is the same story 11bn $ mkt cap on shanghai listed shares (which are owned 75% by DQ NYSE) yet 1.8bn $ mkt cap nyse listing for DQ. They are buying back a lot of shares, shares should drop from 75 mn to 67 in 3 months/ next quarter. P/b of 0.4, !!SVEN it has 3bn $ in cash and equivalents, with quick ratio of 5.6 when mkt cap is 1.8bn $ !!"

[@martinithechobit]

hmm ty.

[@MickeyMekhael]

What u think about SHLS

[@mauriziodellalucia555]

What about its bigger cousin ENPH?

[@alvarodehais1784]

Thanks for the video Sven! Always putting a different angle on this channel, which is great!

[@MTawfik86]

With PE 4, you are not comfortable owning it? Amazon dont pay dividend either, I dont really get your point in terms of rewarding shareholders

[@Value-Investing]

The PE ratio doesn't mean much with a cyclical, plus here the owner owns it, not minority shareholders.

[@MTawfik86]

​@@Value-Investing Thanks for taking the time and replying, I do agree on that point since margins flactuates, also the ownership part. I was just wondering why you critizie them on not paying dividend while they keep growing (like Amazon) Thanks for your videos I really enjoy them

[@shazahrr8674]

I Saw this stock anda i run away.. i think like You!! Excellent analysis

[@MatthewWilliams-qq8ko]

It's always a great content from Sven Carlin. I even followed his page on Facebook.., easier to connect with him

[@nexitoxicgaming8377]

How about daqo new energy?

[@JB-jkhb1972]

Excellent analysis….. not a munger/buffet like stock …. Would not touch it

[@Value-Investing]

:-)

[@pascalladal8125]

Sadly, this looks like a case where its price history is warranting for caution, and this caution is hurting the stock price. It is so cheap, people feel they are missing something and we are caught in a vicious circle.

[@patrickshanghai2064]

very interesting ideas. yes lots of grey in Chinese companies. could be a good timing, though. maybe the Chinese company buys out the US company.

[@Value-Investing]

:-))) anything can happen!

[@michalmizerak9654]

Is this on Toronto exchange?

[@sheanathan3566]

Loved your take and evaluation- Classic Sven at his best

[@user-jt5nd3yq4u]

Great video and analysis like always, thanks!

[@Value-Investing]

Much appreciated!

[@nickstearns4007]

I feel like even though it is "Canadian Solar" the ties with China are so strong, I am essentually buying a chinese stock. Got burned pretty hard on BABA and Tencent due to geopolitical reasons, so I am watching this one still. Companies wise, I love it. But the risk is forsure there despite the finiancials. And when ever we reenter another large growth period for solar/ Green Energy(prob after all the negative world news and Inflation cools further) we will see them push ESG harder again.

[@MatthewWilliams-qq8ko]

It's always a great content from Dr. Sven Carlin. I even followed his page on Facebook.., easier to connect with him

[@wht9964]

im bagholding this since $46

[@mktwatcher]

Excellent review Sven. You brought up some excellent points that could be detrimental to investors.

[@rudolfdesadeleer7995]

DQ trades at 25 dollars per share and has 52 dollar in cash per share....they are also doing 800 million dollar buyback

[@mr.sandman2811]

same, check DQ its CISQ brother but better valuation and insane arbitrage. "you looked at CISQ, but look at DQ (nyse) daqo new energy, it is the same story 11bn $ mkt cap on shanghai listed shares (which are owned 75% by DQ NYSE) yet 1.8bn $ mkt cap nyse listing for DQ. They are buying back a lot of shares, shares should drop from 75 mn to 67 in 3 months/ next quarter. P/b of 0.4, !!SVEN it has 3bn $ in cash and equivalents, with quick ratio of 5.6 when mkt cap is 1.8bn $ !!"

[@AliasKempt]

Can we do ZIM stock? Shipping stocks seem to be at the bottom of the cycle.

[@TheRustyLM]

Yes. But Globalization is over for the long while.

[@tr4nscend]

value trap

[@heikoderiese]

excellent learning

[@Value-Investing]

Many thanks

[@MatthewWilliams-qq8ko]

Great video Sven. We love you

[@PanJapa12321]

Where is Rubis now?

[@WyattCarter-om5sv]

Thank you for the insight. Great job

[@nixielee]

Very important to point out stuff like this, good work

[@Value-Investing]

Glad you think so!

[@josepha9313]

Nice look, thanks.

[@i.g.4090]

Great! Thank you!

[@Value-Investing]

Glad you liked it!

[@AnkurVarsheny]

After so much diligence stock is down 25% and market is up 35%

[@garp4388]

Very good review, thanks !

[@shawwak]

Is this generalizable to the whole solar sector?

[@Value-Investing]

No bevause there are different businesses with different advantages

[@roberttorrance731]

7 months later - the share price is 17 ish. Risk of dodginess is far too high with this one.

[@Value-Investing]

thanks for sharing!

[@Reza16888]

Is it time to buy CSIQ now? It's even lower now.

[@danielegianetti5599]

Listen to video and you will find your answer

[@Reza16888]

@danielegianetti5599 I think Sven danced around it and didn't mention buying or selling clearly. Also, I sometimes don't understand his accent, as much as I like what he says. What was your impression? Buy, sell, or wait?

[@danielegianetti5599]

@@Reza16888 I'm pretty sure it was not to buy

[@Reza16888]

@danielegianetti5599 Well, I did a LEAP Strangle on it. Sold Jan 2025 $15 Put and $30 Call. Let's see what happens! I'm nervous a little, though 😬

[@SR1XM]

And yeah sort the echo out 😅

[@viktorcojocaru5411]

very good analysis!

[@Value-Investing]

Thanks!

[@Random.Walker.]

One of the worst value trap that I've ever seen. I wouldn't pay even a dime for this whole company. Let me explain Yellow and red flags: - Capital intensive and low Return of capital. - Very high debt. - Negative free cash flow. - If company have low Return of capital they should return money to share holders. - Money and assets not cover debt. - Unfriendly management. - The other things you already mentioned. "If the business earns 6% on capital over 40 years and you hold it for that 40 years, you're not going to make much different than a 6% return -- even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive-looking price, you'll end up with one hell of a result." -Charlie Munger

[@ionut-alexandrubacalu5640]

What do you mean with "- Money and assets not cover debt." ? Their equity is more than 2Billion$, their assets are bigger than liabilities. The reason why they do not have positive free cashflow is because they invest a lot.

[@Random.Walker.]

@@ionut-alexandrubacalu5640 Summary: Cash, Cash Equivalents, Marketable Securities 2B$ Total Long-Term Assets 3,9B$ - Short-Term Debt 3,603B$ Short-Term Debt & Capital Lease Obligation 3,613B$ Long-Term Debt $1,241B You can count: Accounts Receivable & Total Inventories but they may not be worth much if there is downcycle. Payments unpaid and the value of the property is not that much. Second point: Do they invest because of competition and keep factory running or to grow margins? I suspect the first. For example telecommunications a field where these companies spend large amounts on their networks each year to remain competitive and offer their subscribers new products. Solar panels are just bulk product where you need pump more and more money in order to keep even competitive.

[@mr.sandman2811]

what about DQ its CISQ brother but better valuation and insane arbitrage. "you looked at CISQ, but look at DQ (nyse) daqo new energy, it is the same story 11bn $ mkt cap on shanghai listed shares (which are owned 75% by DQ NYSE) yet 1.8bn $ mkt cap nyse listing for DQ. They are buying back a lot of shares, shares should drop from 75 mn to 67 in 3 months/ next quarter. P/b of 0.4, !!SVEN it has 3bn $ in cash and equivalents, with quick ratio of 5.6 when mkt cap is 1.8bn $ !!"

[@massimocaluori]

Good job. Thank you.