November 9, 2009

Nathalie gave an awesome presentation on Mergers & Acquistions! A lot of insightful and helpful information for those of you curious about/interested in Investment Banking! We went over some of the different types of mergers and acquisitions, including¬† “hostile takeovers”, “reverse merger”, etc. The presentation will soon be posted on the blog for those of you to use as a helpful reference!

We also looked at two “Green” (i.e. renewable energy) stocks: Cree Inc and Trina Solar Ltd.

Cree Inc.: a market-leading innovator of lighting-class LEDs, LED lighting, and semiconductor solutions for wireless and power applications.

Trina Solar Ltd: an integrated solar-power products manufacturer based in China; produce monocrystalline photovoltaic (PV) modules ranging from 165 watts to 230 watts in power output and multicrystalline PV modules ranging from 210 watts to 230 watts in power output.

We then took into account the factors that would help us determine which particular stock is a better buy. After analyzing and reviewing the important valuation specifics of each stock — including EPS, PE ratio, PEG ratio, etc. — as well as discussing recent news involving the “Green” industry, and more specifically involving the light bulb industry (for instance, how LED lightbulbs are on the rise…for example, a recent news release estimated that “Guangdong (China) LED lighting industry market size in 2015 is expected to break through 80 billion yuan (US$12.8 billion), which account for 50% of the global share.” )

So, although not many of us knew so much about the future of “monocrystalline and multicrystalline photovoltaic (PV) modules”, whereas we were a bit more familiar with LED lightbulbs (more and more frequently LED lightbulbs are being used in various electronics, including cameras, TV’s –LED replacing plasma–, etc)… Please keep in mind that just because we didn’t know much about PV modules doesn’t mean we can assume they aren’t going to be profitable.. However, we were able to use another source of information to analyze and determine which stock would be best to buy: the good ole’ valuation indicators!! (feel free to check out the valuation details of each stock, either via your own research using tools such as Google Finance or ETrade, or you can check out the presentation as well for the specific valuation details we looked at)

In the end, after discussing the important factors, the group felt that Cree Inc looked like the better stock to buy at this time.and so…. we voted…. AND THE MEMBERS OF OIG HAVE MADE THE DECISION TO ADD CREE INC TO OUR PORTFOLIO!! WOOT!¬† Be sure to keep an eye out on our new baby and see if it ends up performing as well as we hoped!

For those of you curious about Trina Solar Ltd (the underdog/rejected puppy)… itd be interesting to see whether or not our prediction holds true that Cree Inc was the “better buy” over Trina..