A-Power Energy Warns on Fourth Quarter
A-Power Energy (APWR) is out with a heck of a pre-announcement this morning and the stock tanked. Luckily we sold almost our entire position out as it hit resistance near $6 just over a week ago BUT we began rebuilding the position (and it was up to 2% of the portfolio) going into today. (
Dec 22: Bookeeping - Beginning to Rebuild A-Power Energy) At the time I wrote
I actually cut even more as the stock failed $6 and we went into the week down to a 0.8% stake. The stock is down 11% today alone so we'll begin to redeploy back into the name, but allowing for a move back to the upper $3s/low $4s if the market returns to reality in the coming weeks. I will continue to trade this wide range (upper $3s to 50 day moving average, currently $6ish) until the stock proves it is ready to make a move above resistance.
So as you can see by the chart, despite the warning the stock held its $3s range on the bottom side - at which point as I said above I'll be buying.
However,
this news gives me pause.
- For the 2008 fourth quarter, the Company now expects revenue to be approximately $76 million and net income to be approximately $5 million. Both revenue and net income guidance are now lower than previous guidance of $158 million and $15.5 million, respectively.
- Mr. Jinxiang Lu, A-Power's Chairman and CEO, commented, "Due to the unusual current macro economic conditions, a few of our key potential contracts, which we expected to close in the fourth quarter, were postponed.
- As our projects are highly capital intensive, we always require a sizeable down payment as a key component of our standard contract.
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