Hoku Scientific still stretching nicely

Hoku Scientific plans solar power plants

In its lifetime, the Campbell-Hoku system is estimated to produce enough electricity to power approximately 6,700 homes for one year and eliminate 38,161 tons of carbon dioxide while saving 120,000 barrels of oil over 25 years.

Oil dependence is painfully strong in the islands, but Hoku doesn't plan to reduce prices. A win for Hoku shareholders.

Hawaiian energy showdown?

Sorta. Today, Jim Cramer gave a thumbs' up to Hawaiian Electric during the "Lightning Round" on Mad Money.

HECO reported a dismal Q2 recently, and as a resident of Oahu, I'm not surprised. How is any utility here supposed to grow when population growth is stagnant? On the other hand, HECO has a partnership with Hoku Scientific in regard to solar panels. So I wonder, which is the better long-term investment: HECO or HOKU?

My money is literally on HOKU. Just a bit of money. No question, Hoku could swing and miss. Hoku could also knock a series of pitches out of the park come 2009. HECO has limited growth prospects, though it is (finally) trying to venture into alternative energy with a real sense of commitment.

I'll put more cash into my A grade picks any time before HOKU or HECO, but the local angle is compelling for me.

Pupule Paul is slightly long HOKU.

Hoku soaring despite market freefall

The academians are saluting Big Ben Bernanke. The trading pit lifers must be delivering another kind of salute.

Yesterday, I woke up (who does this at 3:30 a.m. with no alarm?) a few minutes after the opening bell, too late to even consider buying some Foster Wheeler before the bell. Fortunately, there was no decision for me. The Co had missed estimates and plunged before the market opened. Still falling this morning (currently $96 after hitting $112 in Tuesday's extended hours).

Today, I'm up again without the alarm clock. It was almost 4 a.m. when I turned on the laptop and TV to find the market back in a sea of red. Funds are closing shop again and it's not over by a long shot. My watch list is mostly red with a few exceptions. Among them is Hoku Scientific, up for a second day in a row.

Interesting. HOKU was up yesterday without news, but someone probably leaked news about, well, this morning's announcement. This is a bizarre stock sometimes, not because of the Co, but because of public sentiment that goes to different extremes. A simple announcement about a contract for the building of the Co's polysilicon plant in Pocatello, Idaho, has driven the stock to a gain of more than 40% off its recent low to $10.50.

With the Dow Jones down as much as 241 points earlier and the Nasdaq currently off by 11 points, that's quite a gain. The positive trading in HOKU for three sessions in a row is a welcome bounce for an oversold stock. Should HOKU be at the $14 level of last month? Or was the recent low of $7.50 more realistic? The moving averages say $9 is where the stock's tight range is.

If this is short covering, maybe there was simply an abundance of profit-taking, or lack of greed on the part of bears. But it seems quite strange for any stock to move this much over a routine announcement. Then again, any massive gain up or down is a trip. The plant won't be completed until early 2009 at the earliest

And as I write, the Nas has gone green. Hoku's day may just be starting.

Pupule Paul is slightly long HOKU.

Hoku, Dendreon longs feel the pain

While I view some of my favorite stocks as pricey, they're doing better than small-cap underdogs HOKU and DNDN.

Hoku took another pummeling today, down 2.6% to $9.04. It's been a steep decline from a recent high above $14, but it's not a shock considering the Co is, at earliest, 18 months away from producing polysilicon. I'm bullish on the Co, but I'll wait this out before picking up more shares.

Dendreon had a freaky moment early in the day when CNBC's Mike Huckman gave viewers a teaser about the Co. That sent the stock on a wild ride from the $7.50 range to $7.93 in less than 10 minutes. Turns out, Huckman was referring (on his blog) to a lawsuit filed in Ohio against FDA honcho Andrew von Eschenbach in regards to prostate cancer immunotherapy treatment Provenge.

It didn't take long for buyers and sellers to get the marbles back into their heads. DNDN closed the day down 2.1% to $7.51.

Pupule Paul is slightly long HOKU and DNDN.

Solar on fire from FSLR to YGE

The solar kids don't even know a storm just passed.

They just keep running around in glee. First Solar, with questions hovering over whether it'll make earnings expectations of 7-8 cents per share, finished strong today. While I slept (5-10 a.m. Hawaii time), the stock languished around $110 for much of the session. Then, with two hours left, FSLR went crazy and climbed to a $120 close.

With earnings due out tomorrow, did somebody leak something? Perhaps drawing a residual effect, tiny Yingli Green Energy moved up 6.4% to $18.16. YGE has spent the early part of the day up about 20-40 cents before making the move for a gain of $1.09.

Shares of YGE were at $16 just two sessions ago. Will it pull back or trade with its sector?

I think of First Solar as overpriced, especially after today's 8% run to $120. This Co doesn't even have more revenues than tiny Yingli. What FSLR has is a unique product and major financial muscle, i.e. the Walton family, and scored a $1 billion secondary offering recently. That's clout. Still, I might step into the Yingli Green House simply because of the sector's heat and Yingli's location. China is spending big on alternative energy.

A buy into Yingli would be counter, in a way, to my small holding in Hoku Scientific. The latter has a non-binding contract with a Yingli competitor, big boy Suntech. I like the fundamental numbers of STP very well. STP traded up 1% to $39.89.

Can FSLR run up again tomorrow before earnings? After trading sideways since July 9, today's big move on strong volume is clearly bullish. Hmm...

At this point, STP looks like a safe investment compared to its peers in the sector, while YGE has a lot of upside. I can't let go of FSLR though, because of its "thin film" technology. Cheaper to make, not quite as efficient as silicon ... but profitable.

How much so? Tomorrow's earnings report awaits.

Pupule Paul has no position in these stocks.

Studying Solar: First Solar

Can Yingli Green Energy or any other solar Co take a First Solar type of rocket ride?

FSLR went from $27 in January to a recent high of $119. At a current PPS of $110, FSLR has a market cap of $8 billion with a P/E of 479, forward P/E of 95 and a whopping PEG rate of 3.10.

Unbelievably, FSLR has revenue of just $188 million, lower than Yingli. The company raised $1 billion recently in a secondary offering at a price of $107 per share. The offering is a huge boost, obviously.

One of the biggest differences between First Solar and Yingli is quarterly revenue growth. FSLR's rate is 391%. The Co has $324 million in cash and total debt of $95 million. Positive. Though there are 73 million shares outstanding, only 18 million are in the float.

Forbes.com reported that CEO Michael Aheam and members of the Walton family have filed with the SEC to sell shares. Aheam plans to sell roughly 15% of his holdings, while the Waltons will sell about 10% of their stake. The Waltons own 53% of the Co.

Tomorrow is a big day for First Solar. Earnings will be out and expectations hover around 7 or 8 cents per share. Short interest is 18%. The narrowest miss could send FSLR for a slide, so I don't anticipate buying shares until after tomorrow.

It's certainly a lot of information to absorb for a solar ignoramus like me. Is FSLR's dedication to cadmium telluride — less efficient yet more affordable than silicon — the wave of the future? The market says yes. What makes this a little more interesting for me is that I've been highly interested in Hoku Scientific, a company that is planning to build a facility in Idaho for polysilicon production.

Yingli, First Solar, Hoku. Being a lifelong resident of Hawaii — I've never understood why solar energy was never a focal point here — the sector is nothing short of fascinating to me now.

Pupule Paul has no position in YGE and FSLR, but is a bit long HOKU.

Studying Solar: Yingli Green Energy

Last night, I did something I hadn't done in weeks, maybe months. I visited a dozen or so blogs that I'd bookmarked back in February, March and April.

Some folks go fishing on Sundays. Hopefully, I'll make a habit of visiting some of the most compelling stock bloggers around. I can't recall which of them suggested YGE, but looking at this solar company's numbers has me pessimistic.

Yingli Green Energy is yet another Chinese solar power producer that is somewhere between the land of speculation and the forest of riches. China is, of course, pushing hard in alternative energy. Air pollution is a major problem, shortening lives and endangering basic health in many cities. The problem is growing, extending to rural areas that are becoming more industrialized.

At a PPS of $17.07, Yingli is trading 58% higher than its opening-day close of $10.80 on June 8. The stock traded at a high of $20.40 on July 12 before pulling back for the next seven sessions to $15.01 on July 20. Five sessions later, the stock seems to have consolidated, even through the selloff in the Dow Jones and Nasdaq.

YGE has a market cap of $1.1 billion on revenues of $246 million. The stock trades at 266 times earnings. Not a typo. The forward P/E is 2.8. Again, not a typo.

PEG is 1.30, pretty robust. Profit margin is 10% and operating margin is 20%. While quarterly revenue growth is 113%, quarterly earnings growth is negative (-66%).

The Co has less than $14 million in cash with debt of $187 million. Not impressive.

There are 64 million outstanding ADSs with a float of only 26.6 million. I'm almost 100% sure that the difference is because of government holding in the Co, as is the case with many Chinese stocks.

Only one brokerage house, CIBC, has any coverage. CIBC rates YGE "Sector Perform." Some big names were involved with bringing the Co public. Goldman Sachs was global coordinator, UBS AG led underwriting, along with Piper Jaffray and CIBC. (Piper Jaffray is owned by UBS.)

I'll continue to watch this Co. Why? I haven't paid much attention to solar stocks, with the exception of Hoku Scientific, which hasn't been a solar-oriented Co for very long.

Is there any logical way to explain a 60% spurt for a Co. that is basically losing money and has little significant revenue? Not really. The only explanation is that Yingli is in a hot sector in a fast-growing mastodon known as China.

Extra point: YGE does have a new contract to provide modules to Control y Montages Industriales CYMI S.A. of Spain. Coincidentally, Spain is also where First Solar does business.

Pupule Paul has no position in YGE and FSLR, but is a bit long HOKU.

Pupule promotions, demotions

With a tide of earnings reports in, it's time for some shuffling in my stock pick lists. Movin' on up:

Nintendo NTDOY.PK whacked it out of the park with its gigantic revenues and profits.

If it's one thing about the Japanese market, the fluff and wild speculation are just not, well, fluffy and wild. Think about it. While we have intrigue and bubble thoughts hovering over China — not to mention the way the government's ownership in major stocks — it's not so in Japan. Savings rates among citizens are astronomically high, as always, and bubble-icious stocks are not as prolific as they are in China or the U.S.

That's not why I am so devoted to Nintendo, however. It's about the numbers, which don't lie. That's why I'm backing up my bullish stance (and holding) by moving NTDOY.PK from B+ to A-.

Finally.

Garmin This is a Co that was on my B list when it should've been at B+, which is where I'm moving it today. Not understanding what the Co does is a large reason why I paid so little attention to it. Strictly on the numbers, though, I liked it at the B level. GRMN's earnings report is due out on Wednesday.

Demoted:

Spartan Motors As a Co, not much has changed for SPAR. Landing contracts (or not) is a way of life, an irrefutable fact of life that alters its stock. But the flip side of it is that the fundamentals of Spartan won't make investors a profit unless revenues are realized, and without the latter, the stock has tumbled mightily. As much as I rely on a Co's fundamentals, stocks are about popularity to an unfortunate, but real extent.

Is yesterday's $1 million stock buyback going to turn the tide? With the earnings miss (by 6 cents per original estimate), that'll be tough. The Co is quite the same. Traders who ran it up and knocked it down ... they're the real Jekyll and Hyde here. The real longs will scoop up cheap shares here at $12, particularly with 40% annual growth coming, according to the Co.

Hoku Scientific Demoted from B- to C+. Great prospects, dwindling revenues (per last week's earnings report), huge promises. HOKU is not your average small cap. It's the equivalent of taking a promising young baseball player out of the minors after a short stint and starting him on a major-league team. Hard-working player, diligent on and off the field, but at least a year or two from hitting his stride.

Opposing fans ride him incessantly for his hefty paycheck. Home fans dote on him and believe he will develop into an All-Star in due time. HOKU traded up today, but at $9 is well off its high in the $14 range. This is likely a trader's dream for the coming 18 months.

Volcom An earnings miss has pulverized the stock, which traded today at $38, a 14% haircut. I own a Volcom surfer wallet and like it. However, unless some new products enter the market, VLCM is going to trade sideways for some time. Retail is a rough market, more so with an outdoor-oriented Co that misses in what should have been its best season of the year. I demoted VLCM from B to C+.

Joy Global Earnings aren't due for another month, but a guidance cut from JOYG sent the shares down 14% on Wednesday.

Demoted down to C+ by Pupule.

Dendreon The silence from top brass is deafening. Insider sales, including those by CEO Mitchell Gold, before the stock took a major plunge off a cliff on May 9, still haven't been explained sufficiently by the Co. Worse yet, the lack of transparency has the SEC mired in an "informal inquiry" of DNDN and its clinical trials.

Provenge is Provenge, a potentially life-extending immunotherapy treatment for prostate cancer patients. However, DNDN has shown no signs of life when it comes to navigating the treacherous waters of the FDA, hedge funds and big pharma. Provenge has been shelved for much too long, and no reason the Co has given can excuse the delay for patients.

Demoted from C to D+. Sadly, until management is shaken up or overthrown, Provenge will remain locked up.

Pupule Paul is long NTDOY.PK, HOKU and DNDN.

Hoku bulls hoping for bottom

Has Hoku Scientific stock finally found a bottom?

After hitting a mid-day high of $14.55 on July 16, HOKU went into a tailspin. Shares have been down in seven of the 10 trading sessions since.

With 3.2 million shares traded, today's action was the biggest volume on an up day since July 13. HOKU reached an intra-day low of $8.30 today before closing at $9.28, up 4.2%. Hoku was in a minority of stocks that were up on another bloody day for the Dow Jones and Nasdaq.

With its polysilicon facility still in need of funding, bears are salivating over the prospect of a failure at Hoku headquarters. With $1.2 billion in contracts on the table to global customers, Hoku bulls see a buying opportunity.

Jim Cramer had his take on HOKU during yesterday's "Lightning Round" on Mad Money. Cramer said the stock is a buy at $6 or $7, noting a definite upside there.

With a float of 11 million, this is not a stock for weak stomachs.

Pupule Paul is a bit long HOKU.

Hoku expands plans a bit, shares take a hit

While Amazon blasted off again, shorts again are having a party at the expense of Hawaii-based Hoku Scientific.

The Co announced its earnings report after market and was very forward-looking, as expected. In addition to major contracts with companies from China and Germany, Hoku reiterated its deal with Hawaiian Electric. Hoku also announced plans to increase the size of its polysilicon plant in Pocatello, Idaho.

Traders didn't feel the optimism, taking HOKU down as low as $10.05 in after hours. HOKU had closed the day up 12 cents to $11.27. Here's an exerpt from today's press release:

Dustin Shindo, chairman, president and chief executive officer of Hoku Scientific, said, "We couldn't be happier with the strides made in our polysilicon and solar businesses over the past several months. Without question, the most significant news is the signing of polysilicon supply agreements with Suntech and Solar-Fabrik. These contracts along with our contract with SANYO may result in aggregate payments to us of up to approximately $1.2 billion over ten years."

"Based on these agreements, we intend to increase the planned size of our polysilicon plant by up to 1,000 additional metric tons of annual capacity. We expect that the cost will be greater than $260 million, which was the estimated cost for a 2,000 metric ton per year polysilicon plant, but we have not yet determined an estimated cost. We intend to use the over $211 million in advance payments from our polysilicon agreements to contribute to the financing of the construction, subject to our achievement of various polysilicon production and quality milestones. We plan to cover the remaining construction costs through debt and/or the issuance of equity securities.

Revenues for the fiscal year ending March 31 of 2008 will be down, Shindo added, due to the pullout from solar module manufacturing. Estimates of $7-10 million were pared down to $3-6 million.

For Hoku bears, it's more of the same; optimism and talk. For Hoku bulls, confirmation that the wheels are spinning and Shindo is highly progressive — perhaps aggressive, as well.

When the short-term trading shakes out, will this be a buying opportunity for the bulls? HOKU is trading below $11 for the first time since July 5.

EdgarOnline: Hoku Scientific 8-K.

Disclaimer: Pupule Paul is a skosh long HOKU.

Fools bearish on Hoku

Motley Fool is a source of broad financial information, an online educational niche like few others.

But lately, it seems that MF's sound, fundamental approach to analysis has teetered a bit. After all, MF missed the boat on Google. MF has also panned Crocs to no end. CROX is still a "one-star" stock by M-Foolers who collectively give companies ratings of 1 to 5 stars.

Today, MF writer Matt Koppneheffer explored a number of low-rated stocks, at least by their own brethren. Among them is Hoku Scientific (HOKU), which is up 6 cents for the day to $12.58 on miniscule volume, at least by recent trading standards.

For every reference to Hoku's enormous contracts, there are always bears who contend that the company is a "scam." In all likelihood, this won't change until that first contract is fulfilled and polysilicon is delivered. By then, every bear will turn into an apologist and claim that he covered his shorts and went long while HOKU was still at $12 or whatever the PPS will be when the polysilicon plant is completed in Pocatello, Idaho.

A lot of ifs in the air. Speculation has a place in a portfolio. With HOKU, it's a matter of how much risk you can bear until the first half of 2009.

Disclaimer: Pupule Paul is a teeny bit long HOKU.

Northwest Bio takes a beating, Skins steps up

Bargain hunters are on the move.

The bargain-basement shoppers are never in short supply, and neither is their prey. Even in the midst of a blazing-hot summer, a 100-point down day on the Dow reverse in the last 30 minutes and became a 40-point down day.

A stroll through message boards inevitably yields a sidewalk salesman or two, carnival barkers extolling the virtues of their elixirs. Two days ago, you could find a pumper or two of Northwest Biotherapeutics on forums not devoted to NWBO.OB. True, the Co is the first to market with an immunotherapy treatment (for brain cancer) thanks to limited approval in Switzerland.


However, the limitations and the lack of clarity in terms of Northwest Bio's bottom line as a result of the approval are a mystery. So, the stock has fallen from $7.33 to a close of $3.15 today. That includes double-digit percentage drops in the past three sessions.

[Ed: The Co has stated that authorization for non-commercial use has granted in Switzerland, but that it would apply for marketing and commercialization of its treatment there by the end of the year.]

Six of the past seven sessions were down, and the most recent days are marked by lower volume since 3.9 million shares traded on NWBO's big day on July 9. With a float of only 4.17 million shares, it takes very little to boost or boot this stock, which is why today's volume of 508,000 shares brought NWBO down another 12 percent.

Even a press release from the Co denying any selloff by shareholders Toucan Capital or Toucan Partners hasn't stopped the slide.

Buyer beware. NWBO closed at $2.30 in the session prior to the Swiss news and established no real level of support beyond that day. Finding that floor is a gut-churning experience for Northwest Bio's longs.

Dendreon longs know the churn well. The stock dropped 12 cents (1.6 percent) to $7.41 today, With options expiry looming, DNDN has not had an up day since July 10. The visible support level has been $6.50. DNDN's last stock slump came between June 20-26, when it bottomed out at $6.51.

That was followed by five up days in the ensuing six on healthy volume. It's tempting, though, for longs to unload shares here out of sheer frustration. Maybe casting off a portion of shares would be a healthy compromise, at least for peace of mind. The SEC's "informal inquiry" into the Provenge clinical trials has yet to reveal any news positive or negative.

That's enough to unnerve most investors, but with Dendreon, only the hardiest of souls remain. Hardy or stubborn; I'm more of the latter, and I'm still holding my shares.

Hoku Scientific was up in six out of eight sessions, and hit an intra-day high of $14.55 on Monday. However, Monday was the start of a tumble for the stock, which closed at $12.51 today. In the same way HOKU bolted to a new high last week — descending volume on Wednesday (11.6 million shares), Thursday (7.1 million) and Friday (4.6 million) — this week's decline is relatively similar.

Volume has dropped each day: Monday, 4.7 million shares; Tuesday, 2.9 million; today, 2.5 million. Those are still hefty numbers considering HOKU's float of 11 million shares. This is the first string of three down days for the stock since Hoku announced its first polysilicon contract on June 13. Bears are have been feeding on the glut of optimism, but the decline in volume indicates that the stock is ready to level out sometime soon.

Skins Inc. is the tiniest of the companies I've explored recently. The Co has tantalized footwear fans with a slick marketing campaign, but angered investors by delaying the release of its product twice in the past year. Still, the stock keeps bouncing back up. SKNN.OB was up 11 cents to $1.83 today to end a four-session skid. However, volume was its lowest in eight trading days.

Momentum could resume as a major shoe show nears (July 30). Skins will be there. Enter at your own risk.

Disclaimer: Pupule Paul is long HOKU and DNDN.

Pupule's small caps taking body blows

Has the summer slump finally arrived?

With as much certainty as a summer swell, each summer brings a period of lower volume and downtrend in the market. This time, the lull is showing up in bits and pieces even as the Dow sets a new high. Am I bitter? Aaaaaah ... not really.

I have enough faith in Crocs, Sina, Apple and Nintendo to feel comfortable. Baidu? They lead their field, and what a large field it is. Concerned about the lofty PPS? Yes, but it's a good problem. It's the weakness in my small-cap favorites that is a source of some stress.

Dendreon continues to take a beating — to a pulp — that brings Rocky Balboa to mind. You wonder when DNDN will stop taking the punches and fight back, though. DNDN is down 3.4 percent to $7.52 with an hour left in the session.

Hoku Scientific took a breather yesterday, giving back some gains on a relatively paltry 2.6 million shares. Today, with an hour left in the market, HOKU has retreated 3.4 percent to $12.95 on 3.3 million shares. HOKU is now down 11 percent since its mid-day high yesterday.

Even with this low volume, I think HOKU could possibly drop to $11.85, which would be 18 percent down from yesterday's mid-day high. The stock could also drop 23 percent from its high, as it did between June 26 ($12.80 intra-day) and June 29 ($9.84 intra-day).

A 23-percent pullback from yesterday's all-time (mid-day) high of $14.55 would bring HOKU down to $11.23.

Bears are finally smiling again as HOKU proves to be vulnerable to the whims of traders, but the lack of volume today could mean Mama and Papa Bear may be shooed out of the party real soon. The last time volume was this low — 1.8 million shares on July 5 — HOKU was up in five of its next six trading sessions on strong volume.

Disclaimer: Pupule Paul is long in the stocks mentioned in this story.

Hoku taking a breather

As expected, at least by this pupule, shares of Hoku Scientific are pulling back today after another meteoric rise.

HOKU had reached an all-time high last week, but decreasing volume on Thursday and Friday gave some indication that buyers were running out of steam. Hoku hit a high of $14.55, buoyed by pre-market volume of 228,000 shares. However, they trade at $13.87 now, down 18 cents from Friday's close.

The stock could use a breather as the PPS consolidates at these new, lofty levels. Bears and bulls have had it out on this company for many months now. Bears point to the current state of the Co, with scant revenues and no facility constructed as of yet to build out polysilicon for solar energy companies from Germany to China.

Bulls, meanwhile, point to the Co's swift decision-making and finesse in handling partnership deals potentially worth $1.2 billion. The polysilicon facility is expected to be completed in Pocatello, Idaho, in the first half of 2009.

The most significant pullback for the stock in the past month has been 18 percent, which barely puts a dent in the overall gain. On June 12, HOKU traded at $4.50. Even with this morning's pullback, HOKU is up 308 percent since the first of two key polysilicon contracts were established.

Hoku's amazing run — the stock was at $2.60 to start the year — isn't necessarily done. Friday's volume was 4.3 million shares, down from Wednesday's 11.6 million. The strength of today's action could bolster the bear sentiment if volume is considerable on a down day. Conversely, a strong surge in volume to the plus side could be the fuel to spur any remaining bulls currently on the sideline.

Elsewhere, Apple shares are zooming upward into new territory again. Despite a flat market — the Nasdaq is down by a fraction of a percentage point — buyers are converging on AAPL now that the iPhone is proving to be a hit and earnings are coming around the corner.

Revenue from iPhone sales won't impact the bottom line for second-quarter earnings, but Apple could announce what the impact of the June 29 release could mean for Q3. Lacking any foreseeable bad news, there appears nothing to keep AAPL shares tied down.

Apple traded to $139.98 in the first 30 minutes of the session. AAPL is currently at $138.52, up 81 cents, on 11.5 million shares traded.

Two more A- stock picks, Baidu and Research in Motion, are also up early in the day. BIDU was up $1.74 to $214.56. RIMM was up $4.57 to $232.09.

Crox, Google and Foster Wheeler were also up moderately. Spartan Motors and Amazon were the only A- stock picks that were down early.

Falling again: Shares of Northwest Biotherapeutics took another hit in the first hour today, dropping 57 cents to $4.35. The stock had rocketed to $7.33 a week ago after announcing that Switzerland had granted the Co approval for limited use of its immunotherapy treatement for brain cancer.

NWBO.OB fell for the next few days, hitting a mid-week low of $4.30, the rallying on low volume to $5.10. The stock is trading at $4.49, nearly double from its pre-announcement price per share.

Soaring Hoku due for pullback?

(I started out this piece expecting to do quick summaries of my A- stock picks. Again, I wind up rambling about Hoku Scientific. Can't help myself.)

The S&P and Dow are at record levels, but does it matter?

Yes, it matters for those of us who are invested in indexes. For individual investors, the scenarios can be different. Of my A- stocks, just about all of them have traded on their own terms, to the beat of their own drum, for much of the year. Even my favorite (but not necessarily recommended) small caps do their own thing with a lotta swing.

Take Hoku Scientific, for example. On zero news this week (unless you consider the announcement of the earnings report date a trigger point), traders took it from $11.13 (last Friday's close) to a mid-day high of $14.39 today. HOKU closed at $14.05. Bears who doubted that the Co would receive its $25 million credit line again may have been burned again.

(Update, 2:32 p.m. Hoku Scientific CFO Darryl Nakamoto confirmed this afternoon that the credit line has been approved.)

But at this new level, is HOKU still a buy? For the long-term investor who has faith that the Co will fulfill its contracts (worth $1.2 billion) over the next 18 months, the answer is clearly yes. At $14, $10, $12, the Hoku bulls won't fret in 2009 when the PPS has doubled, tripled, quadrupled or more. At least, that's the line of reasoning.

Hoku is riding the crest of momentum that began a month ago with a series of contract news. Plus, the entire solar sector is riding a tsunami, led by First Solar. For bulls who want a bargain price in HOKU, however, now may not be the time to enter. Why? Today marks the first time in the past month that Hoku's stock has finished with a daily gain for three days in a row. On top of that, the run from Tuesday's close ($12.01) has been supported by weakening volume.

• Wednesday, 11.6 million shares
• Thursday, 7.1 million shares
• Today, 4.3 million shares

That indicates another period of consolidation ahead for the hottest stock of the past month. Hoku bears dream of a tumble back to the pre-solar contract $4 level, but that ain't happening. Instead, the floor for HOKU seems to be at $12 (June 26), and beneath that, no lower than $10. (The stock was at $9.84 on July 2.)

With options expiry and earnings ahead, the best approach for long-term longs may be to turn off the tube, turn off the computer, and enjoy some summer sunshine. For wanna-be longs like myself, the technicals say wait for a pullback. Yes, Hoku does retreat occasionally. Did so between June 26 ($12.08) and July 2 ($9.84). The PPS traded sideways for eight sessions before breaking through $12 last Friday.

Am I saying HOKU is due for another 18% pullback? Heck no. But if the PPS were to pull back that much, that would leave buyers with a bid of $11.52. I could live with that. Easily. But the Hoku rocket has definitely launched. I'm the guy who was hoping to get in at $9 after the PPS spiked to $12. I'll be surprised if it takes another eight days for HOKU to make another new high.

HOKU cyberwars: At YMB, paladinmercenary provides some astute analysis to back his bullish sentiment. Paladin argues that HOKU's 2007 target should be $24 based on book value and milestone payments. His '09 outlook includes a full polysilicon production of 200MT. At 10 times full book value, Paladin sees a market cap of $2.3 billion. If he's correct, based on the current total of 14 million outstanding shares, that would translate to $164 per share.

Disclaimer: Pupule Paul has no positions in HOKU or FSLR.

Another milestone for Hoku

The past 28 days have been marked with milestones for Hoku Scientific.

Today was just another one, as HOKU closed at $13.70, an all-time high. The difference this week is that there has been no new news. Volume has picked up again, but not in the same force as it was in June when new contracts were announced.

In other words, the stock is stabilizing and investors are capitalizing. It's fresh new ground for the pioneers of Hawaii's most impressive growth company in years.

Despite the doubts of media — including Jim Cramer — and a horde of online bears, Hoku has secured $1.2 billion in contracts for its clean energy products for the next two years. Yes, the Co is still in its infancy and its plant in Pocatello, Idaho won't be completed for more than a year.

But this little Co could turn into the giant of all Hawaii companies. The stock? Investors have to be pleased. On June 12, HOKU traded at $4.50.

On June 14, HOKU traded as high as $7.95 after a 10-year, $678 million deal was sealed with Suntech Power (China). Say goodbye to the 4s and 5s.

On June 20, the Co signed a seven-year, $175 million contract with a subsidiary of Solar-Fabrik AG (Germany). Say aloha to the 6s, 7s and 8s. The next day, HOKU set another all-time high, trading at $10.14 before closing at $9.60 on 26 million shares in volume.

Nice.

Two trading sessions later, on June 25, HOKU skyrocketed again as new investors and daytraders stampeded into the stock. HOKU hit a new high of $11.67 and closed at $10.75 on a whopping 33 million shares.

The $10 level, with a ton of new shareholders, proved to be a solid floor for the stock. HOKU traded up to $12.80 — a fourth new high in just 12 days — and closed at $12.08 on lower volume (22 million shares).

From $4.50 to $12.80 in nine sessions? That's a gain of 284 percent. Investors certainly like those contracts.

The ensuing two weeks saw Hoku's stock level out, reaching a mid-day low of $9.84 on July 2 as volume withered up. Merely the calm before another perfect storm.

On July 6, HOKU had its biggest volume since hitting its high and closed at $11.13 on 10 million shares. Say goodbye to the 10s.

The next day, investors continued to pile back on as Hoku closed at $12.65 — including a mid-day all-time high of $12.97 — on 11 million shares.

Two days later, on July 9 — this past Monday — HOKU rose to $12.73 mid-day for another all-time high. It closed at $11.90 on 11 million shares.

Yesterday, yes, another high. HOKU hit $13.66 mid-day and closed at $13.23 on increased volume of 11 million shares.

Today? Volume was down to 7 million shares — still hefty considering HOKU's 11-million float — as the PPS hit another high at $14.39 mid-day.

For investors on the sidelines, waiting for a chance to get back in at $9 or $10, the boat has sailed off. Even $11 seems like a longshot. The only obstacles in the stock's way would be a delay in the construction of the Pocatello facility and a seachange in the one of the most bullish markets of all time.

Why so much cyberspace for HOKU in Pupule's blog? This is timeless. Watching a baby giant take its first steps is more than a passing moment. It is to be treasured. Even for those of us on the sideline.

Disclaimer: Pupule Paul has no position in HOKU.

Hoku one of several stars in solar

Waiting.

Waiting more.

The wait continues. Waiting for Hoku Scientific (HOKU) to drop to $10, or $9, is not going well. After the reecnt run-up, HOKU seemed prime for a pullback. Instead, the PPS ran to nearly $13 before taking a much-needed breather today.

The stock traded down 5% to $12.01 today.

Still, the solar sector continues to scorch shorties. How many longs can truly say they knew this was coming? Sure, China is in major solar-energy development mode. One of Hoku's bigger contracts is with a Chinese company, naturally. The move by solar defies normal convention. Even Barron's writer Eric Savitz is dumbfounded.

Me? I just want a nice entry point. Heck, if a Hawaii company is going to go gangbusters in the market, I want to be in. Especially a Co run by a guy who played high school baseball in the islands. In fact, I covered prep baseball on the Big Island when Hoku CEO Dustin Shindo played for the Waiakea Warriors. I think Tommy Correa was the coach at the time.

Anyway, a toast to Hoku Scientific. A star in the making. I might have to pay up for a real star like Hoku.

Disclaimer: Pupule Paul has no position in HOKU.

Of celestial promise and potential: Hoku Scientific

It's the hottest Hawaii-based stock in years. Hoku Scientific is in position to reach the heavens in a scant two years.
Hoku Scientific (HOKU $11.13)
Chart
Grade: B-

The skinny: This Co, based out of Kapolei, Hawaii, has switched gears in the relatively recent past, but its tenacity in the face of doubters is impressive. The current PPS ($11.50) may have all of the good news baked in so this will be a better buy at $9. Then again, there could be more good news coming around the pike. Like Dendreon, this is a small cap that is a couple of years away from real fruition. Even its processing/manufacturing facility in Idaho won't be completed until 2009. Definitely not for the squeamish, but certainly worth watching closely.

X factor: Can Hoku Scientific survive and fulfill its contracts (non-binding) worth $1.2 billion? The daily trading action on this solar/polysilicon Co is so intense, the PPS leaped from $4.50 to $12.80 on news about the contracts. All in a two-week span of June.

Summary: As a side note, CEO Dustin Shindo, is a Waiakea High School graduate and former baseball player. In fact, much of the executive staff hails from the islands. For a local fan, it's easy to love this Co. As a stock, HOKU is not fundamentally sound — not yet, anyway. No young company that hasn't hit its proverbial sweet spot with revenues and margins is going to be a low-risk investment. The risk/reward, however, is clearly appetizing for small-cap lovers.