Akeena Solar: Worst Solar Stock

By: ispeculatornew
Date posted: 07.22.2008 (8:41 pm) | Write a Comment  (9 Comments)

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AKNS – Akeen Solar (NASDAQ) – (Closing Price – $5.03)

I’ve looked into the financials of several solar companies and Akeena Solar is by far the worst solar company I’ve checked out based on fundamentals. Akeena Solar is a good example of what not to look for in a stock.

For the last five quarters the net loss of Akeena Solar has grown. In Q1 of 2007 Akeena Solar reported a net loss 930,000. In Q1 of 2008 Akeena’s net loss ballooned to 4.6 million.

To make matters worse the company is diluting shares like crazy. In Q1 of 2007 the company reported 16.5 million diluted shares. In Q1 of 2008 the company reported 27.8 million shares. That’s a 68% increase in shares. If the company is ever able to report a consistent profit it will not matter because future earnings are currently being offset by extreme dilution.

To add insult to injury insiders of Akeena Solar have been dumping shares.

Increasing losses and heavy dilution are a bad combination. If you are looking to invest in a solar company I would steer clear of Akeena Solar.

Disclaimer: I do not have a position in AKNS.

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9 Comments

  1. Comment by Yehuda — July 23, 2008 @ 8:26 am

    According your financial analysis, it makes scence that AKEENA is dying.
    But what if the hard days are over now??
    Is it not a good investment,even after dilution??
    Yehuda

  2. Comment by admin — July 23, 2008 @ 8:48 pm

    You should make your own decision but I don’t think Akeena Solar is a good investment. First, the company is no where close to making a profit. It’s losses are actually increasing.

    Second, the amount of shares is increasing tremendously (68% increase in one year). This should not be overlooked. Even if the company was actually profitable it would have to be increasing earnings at 68% just to have flat EPS growth (at least in the last year).

    The only way I would invest in AKNS would be as a play on the entire solar sector. If solar became hot then AKNS would probably trade in tandem. However, I would definitely avoid AKNS as a long term investment (at least based on the financials they have been reporting so far).

  3. Comment by RAINER — July 24, 2008 @ 7:26 am

    I can’t trust any ones ADVICE Who has ADS for Penny Stocks on their site, couldn’t possibly take you serious. I am an Investors Business Daily Subscriber and I don’t have to take any ones Advice, They just publish facts…NOT OPINIONS!!!

  4. Comment by Issac Basonkavich — July 24, 2008 @ 1:27 pm

    The insiders have sold a relatively small amount of shares recently in the $6 range. Akeena is hurting because installation is frozen until the idiots in Washington get through with their dickering over how to renew the incentives for alternative energy. Akeena is well positioned to be profitable with an increase in residential and commercial solar installations. If this doesn’t happen then they will disappear along with my money. Installations will go to local contractors working with large manufacturers-eg. FSLR and Prologis and the wharehouse deals of LA. However, Akeena could move along and upward in any climate. The paradigm is there.

  5. Comment by admin — July 24, 2008 @ 6:27 pm

    Rainer:

    I’ve read “How to Make Money in Stocks” by William J. O’Neal, the founder of IBD and I was not impressed. A lot of his philosophy is based on TA which I think is a bunch of nonsense.

    I don’t like penny stocks but if I exclude them from my Google Ads, which I have done, my advertising revenue (which is minscule) goes way down. I have to make some money for the effort I put into this blog.

  6. Comment by admin — July 24, 2008 @ 6:35 pm

    Issac:

    I think the insider selling is the last thing to worry about. I would be concerned with the increasing losses and even more concerned with the dilution. There are much better solar plays.

  7. Comment by Solar Fun — July 30, 2008 @ 2:00 pm

    This may be a better reason to invest than looking at start up financials.

    http://www.renewableenergystocks.com/PL/news/073008a.asp

    I would disagree with your comment that TA is a bunch of nonsense. I can understand when you look at pink sheet and OTC stocks that it wouldn’t help.

  8. Comment by Amit — August 6, 2008 @ 2:39 pm

    Hi Phil,
    Can we have your opinion on a general philosophy for newbies like how to find a stock and more importantly the stocks on should invest? Basically, instead of any analysis of a particular stock I would like to see a detailed post about how to find a good stock.

    Amit

  9. Comment by admin — August 6, 2008 @ 9:56 pm

    Amit,

    I plan on writing a post about how to find good stocks in the future.

    Phillip

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