Aston Martin Lagonda Glo... Share Discussion Threads

[major clanger] 19/8/2013 16:20

Summary of today's AML broker recs here:

hxxp://www.brokerforecasts.com/news/article/articleId/4653085

MS - OW - TP 469p [unchanged]
ShoreCap - Buy [unchanged]
ESIB - Neut - TP 362p [unchanged]
Numis - Hold - TP 415p [unchanged]
Westhouse - Add - TP 470p

[edmundshaw] 19/8/2013 10:24

Solid enough results, looks like some progress on the cards in various departments (costs, European arm, fleet, marine) offset by some weakness in cat re margins.

H2 cat levels look low. Another benign twister season in the US - the only (very) big E5 tornado missed all the towns, though sadly killed some storm chasers. Will depress margins shorter term, but also payouts low.

At over 6% yield, solid at only a third of targeted ROI, this looks good value to me. Added.

[buywell2] 04/7/2013 07:42

House insurance issues could be many and varied due to this , from water damage to fire to roof damage and repair and replacement costs of panels to name but few.

Insurers of the installation companies and panel suppliers could also get hit BIG








................. SOLAR PANELS , :- Have you been fitted up ? .............




A lot of these panels from China have been installed in the UK

I think many will be defective after 3 years , more after 5 years , most after 10 years ..... 25 years guarantee was and is a pipedream.

That is due to production issues

Then there are issues to do with using contractors to install them on your roof, leaks from same should start to show damage re water ingress after circa 2 years of installation ..... contractors who are taken on for 6 or 12 month contracts take short cuts to get the job done and away.

Bodge jobs with temp waterproof filler/mastic round drilled holes to attach the panel support brackets to the roof trusses will be many.


Next Shoe To Drop: Shoddy Solar Panels From China



Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter

The photovoltaic industry is in a perverse situation. To make power generation from solar competitive, prices of solar panels had to come down. Tens of billions in subsidies were plowed into the industry. Technological advances came along. And the price per watt crashed exponentially, from $76 in 1977 to about $7 in 1989. Then it leveled off. By 2000 it began to drop again, hit $4 in 2005, $2 in 2010, and a forecast $0.74 per watt in 2013 (graph).

But it wreaked havoc. Business models collapsed. Funding dried up. PV companies bled red ink. In the US, a slew of them, including Solyndra, went bankrupt. Others shut down or changed course. Tens of billions in taxpayer subsidies and investor capital spiraled down the drain.

In Germany, solar power was a political priority. They don't have much sun, but they have more sun than oil, the logic went. Now even Bosch Solar Energy AG is fleeing the business after burning through $3.1 billion. Same story in France, in Spain. Bloodletting everywhere. They all blamed the low prices of Chinese solar panels. Complaints that led to anti-dumping proceedings in the US and aggravated the trade war between the EU and China [my take: Germany Fires Salvo In Sino-European Trade War ... At Brussels].

But solar power generators, from utilities with large-scale installations to farmers with solar panels on their barns, were ecstatic about the low prices. They enjoyed subsidies, nearly free financing, and the hope that the system would more than pay for itself over the course of its 25-year life span. It would be a good deal.

But it might not be. The price war that Chinese manufacturers waged was a suicide mission. Now even they're going bankrupt, including their erstwhile number one, Wuxi Suntech, when the banks pulled the ripcord in March. Existentially threatened, they cut costs ... and corners.

Defective solar panels can be costly. The New York Times described what happened to the PV installation on a warehouse roof in Southern California whose promise of a 25-year life span disintegrated along with the protective coatings on the panels after only two years, and part of it went up in smoke when defects caused two fires.

"Worldwide, testing labs, developers, financiers, and insurers are reporting similar problems and say the $77 billion solar industry is facing a quality crisis," the Times reported. But instead of tracking defects industry-wide, manufacturers hide behind confidentiality agreements that treat their name as a secret. So no one knows the extent of the crisis. And it's just the beginning: since nearly half of the 7.2 gigawatts of capacity in the US were installed in 2012 in a burst of incentive-fueled activity, most of the problems have not yet come to light. But some have:

Executives at companies that inspect Chinese factories on behalf of developers and financiers said that over the last 18 months they have found that even the most reputable companies are substituting cheaper, untested materials. Other brand-name manufacturers, they said, have shut down production lines and subcontracted the assembly of modules to smaller makers.
STS Certified, a French testing service, evaluated 215,000 PV modules at its Shanghai laboratory and found that defects had jumped from 7.8% in 2011 to 13% in 2012. An entire batch from one manufacturer was defective, but STS refused to identify the culprit – a company listed on the New York Stock Exchange – due to the confidentiality agreements.

German solar monitoring firm Meteocontrol found that 80% of the installations in Europe it had examined were underperforming. SolarBuyer, based in Massachusetts, audited 50 Chinese plants over 18 months; defect rates ranged from 5.5% to a dizzying 22%. During repeat audits, it found that plants were constantly substituting cheaper materials. Ian Gregory, SolarBuyer's senior marketing director, warned: "If the materials aren't good or haven't been thoroughly tested, they won't stick together, and the solar module will eventually fall apart in the field."

Even Chinese insiders admit it: "There are a lot of shortcuts being taken, and unfortunately it's by some of the more reputable companies, and there's also been lot of new companies starting up in recent years without the same standards we've had at Suntech," lamented Chief Technology Officer Stuart Wenham – the same Suntech that was pushed into bankruptcy in March.

There are still some lucky solar developers and installers who claim that they haven't run into quality problems yet on systems installed in 2012. But they're brand-new, with 24 more years to go. And some of the defective panels weren't made in China; all manufacturers are under pressure to cut corners in order to survive. First Solar, a US company, has reserved $271 million to account for the expense of replacing defective modules sold in 2008 and 2009. No word yet of those sold during the binge of 2012.

The costs of these defects will eat further into the industry that is struggling to become financially viable. Yet, in a cruel twist, the price of solar panels must continue to drop for solar power to be competitive without subsidies. Taxpayers, stung by austerity in Europe and by the sequester in the US, are already less than enthusiastic about propping up the industry forever. At some point, it must be able to stand on its own, at still lower prices that magically allow manufacturers, and not only power generators, to thrive – an illusion, for now. But waves of "cheap" solar panels that suddenly become very expensive after they're installed will cause more bloodletting and push the propitious date further into the future.

[deadly] 10/6/2013 09:03

Strikes me that the fall has gone too far, and it's worth buying for the yield alone.

[effortless cool] 18/5/2013 10:55

Climate change is less of an issue for Amlin than premium rates, which look likely to fall significantly over the coming year. (Key renewal dates are 1/6, 1/7 and 1/1).

That doesn't matter if the wind doesn't blow - underpriced reinsurance will still produce profits in a lucky year - but it will certainly be getting much harder to make profits from catastrophe insurance.

There are two main reasons for the weak pricing environment - good experience (Sandy was not a major loss for property XL reinsurers) and competition from the capital markets. The latter will, I suspect, eventually come a cropper, as I don't believe that the capital providers really understand the risk they are taking.

Until there is an event that removes significant capital from the market, however, things will definitely be a lot tougher for Amlin and other similar businesses.

[roger-lawson] 18/5/2013 10:46

Attended a very interesting Annual General Meeting at Amlin last week and here's a blog post I just wrote on the subject:

Tornados in Texas, and crying Wolf in the FT

Attending the AGM of Amlin, a major "catastrophe" insurer, reminded me to consider the issues of climate change again. Coincidentally there were tornados in Texas last week and also an article in the Financial Times by their correspondent Martin Wolf entitled "Why the world faces climate chaos". Without debating the question of whether humans via the generation of CO2 are creating climate change (which Mr Wolf argues is "basic science" in his usual polemical style when many others disagree) it's worth noting that he simply concludes with the observation that there is no political will do to anything about it. At least the FT did print a letter from someone with a contrary view of climate change science. Mr Wolf is good at crying wolf but fails to offer any practical solutions.

Meanwhile at the Amlin AGM more immediate issues came to the fore. One questioner raised the issue of the recent tornados in Texas (six people dead and widespread devastation) and would this have any impact on the company. The simple answer was no because the company budgets for some catastrophes so shareholders could still sleep at night.

Although climate change is argued to create more "variable" weather and hence more frequent disruptive events such as tornados, cyclone and floods this of course might actually help Amlin's business as there will be more need for insurance cover and the cover will become more expensive. One comment made at the AGM was that insurance companies were actually moving into the catastrophe segment because it was counter-cyclical, i.e. better perhaps to invest in that than in the financial or commodity sectors.

But it surely is true that if you want to hedge your bets on climate change then investing in catastrophe insurers such as Amlin might be a solution. If the science is true then the business they write will grow. If it is not true then their claims rate will be low but people will be scared enough by all the talk of disasters to buy insurance anyway. Amlin investors should probably encourage Mr Wolf to write more articles of the same tone.

Other issues that arose at the Amlin AGM were the appointment of a new non-executive director who already had seven other roles/directorships, how the company managed to improve the returns it made on bonds last year, and whether the company could insure against an exit from the EU – on the last question the Chairman indicated they were probably self-insured.

A full report on the Amlin AGM is present on the ShareSoc Members Network for those who wish to learn more.

Roger Lawson,ShareSoc 18/5/2013

[spirito] 11/4/2013 14:21

If we clsoe blue today it will be a great signal for the future SP

[spirito] 10/4/2013 16:33

SP Held very well to say we gone ex-div today

[spirito] 09/4/2013 09:13

Thanks for the post Colonel.

[colonel a] 09/4/2013 09:11

You are not alone.
But I, and I guess many others, are happy to ride the waves with a long term view.

[spirito] 09/4/2013 09:08

Should be a good day today before we go exdiv tomorrow - on my own, on my own, on my own!!

[spirito] 08/4/2013 10:14

The dividend is very healthy on this stock.

[ursus] 29/1/2013 11:24

coolie or someone else who knows the sector ---

what do you make of these board changes? do they explain relative weakness against both general market and sector?

[thamestrader] 20/12/2012 10:34

Agreed, and the market seems unworried by the figures. Same for another company I follow (CGL) who announced a similar estimate ($200M in their case) this week.

Must admit, I did think of selling and buying back after the figures were "out there", but my apathy paid off.

[edmundshaw] 30/10/2012 17:28

Hurricane Sandy is already expected to cost more than $20 billion in repairs to homes, offices and major infrastructure, Bloomberg News reports.

An Oakland, California-based risk assessor "estimated Sandy would cause as much as $20 billion of economic damage with about $5 billion to $10 billion of that in insured losses," says the report.

Similar to my insured loss estimate. I'd imagine cat insurance in the N.E. of the U.S. might be (a) less common, but (b) cheaper as the likelihood there is much lower. So maybe somewhat worse than my first thoughts, but still well within the industry comfort zone.

Sad to see reported deaths, I was hoping the advance notice for this storm would minimise this more.

[edmundshaw] 30/10/2012 09:48

Some selling doubtless because there's a near-hurricane raging through the U.S.

However, last time I saw the estimates for damage were $15 billion in property damage (so about $7.5b insurance claims). Katrina was $81 billion. Because of its extent, business losses from Sandy may be higher than normal, and some of these will be insured, but still, this is just normal business for Amlin.

Happily, because of the slow moving nature, loss of life is likely to be minimal. And without hurricanes there would be no cat business, and every hurricane puts upward pressure on rates, so I cannot see a serious downside for Amlin in this case. I have added on weakness...

[edmundshaw] 20/8/2012 08:01

Obviously an excellent H1. Bear in mind though that catastrophes have been few this year to date. The comparison with last year is striking...

[cwa1] 20/8/2012 07:09

Sounds reasonable on first glance:-



Charles Philipps, Chief Executive, commented as follows:
"This is a welcome return to profit and the strength of our underwriting result underlines the quality and diversity of our business. The improving trading environment is creating many opportunities for profitable growth, for which we have both the capital and the underwriting capability to take advantage."

[edmundshaw] 10/5/2012 16:01

Added a few after Beazley's IMS today. Cat activity has been benign (must be the weather, next door's moggie is usually yowling away around now). Bodes well for Amlin...