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Sunday, November 1, 2026

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@StableBread

Fajasy on X

First Solar $FSLR trades at 6.7x TTM EBITDA and 10.4x TTM net income, while TOYO Co., Ltd $TOYO trades at just 0.9x and 2.0x. At $3.83/share, $TOYO has a market cap of $163.6M and an EV of $137.2M ($163.6M + $25.7M of bank loans + $51.4M owed to VSUN, an affiliate - $103.5M of cash). It trades at 0.9x TTM EBITDA of $156.4M, 2.0x TTM net income of $80.5M, and 0.78x its $209.8M of book value. Since 80.7% of its H1 revenue came from U.S. end customers, $TOYO’s closest comps are four other listed solar manufacturers selling into the U.S. (TTM multiples as of the October 26 close): → First Solar $FSLR (U.S. thin-film panel maker): 6.7x EV/EBITDA, 10.4x P/E, 1.75x P/B, and down 47.2% from its 2026 high. → Canadian Solar $CSIQ (panel and battery storage maker): 18.8x EV/EBITDA, a net loss, 0.22x P/B, and down 65.2%. → JinkoSolar $JKS (China-based panel maker): A net loss, 0.19x P/B, and down 72.7%. → T1 Energy $TE (Texas panel assembler building a U.S. cell plant): Negative EBITDA, a net loss, 2.95x P/B, and down 82.4%. So the market prices $TOYO’s earnings at 0.9x EBITDA, less than a seventh of First Solar’s 6.7x, a multiple that only makes sense if the four U.S. trade actions on its Ethiopian cells wipe out most of those earnings. Only $TE has fallen further from its 2026 high. I was originally going to write up T1 Energy until I found $TOYO, which offers a more attractive setup mainly because (1) it’s profitable, with $80.5M of TTM net income vs. T1’s $367.8M net loss, (2) it trades at 0.78x book vs. T1’s 2.95x, and (3) it has $26.4M of net cash vs. T1’s $629.2M of net debt.
@convequity

Convequity on X

In our view, distributors may have accumulated inventory because they expected shortages, and that inventory could add supply and pressure memory prices, though we have not verified the reports. Disk use in one of our agent environments has been heavy. That is evidence of storage demand. It tells us little about how much DRAM or HBM the models need while running. Existing suppliers and Chinese manufacturers are expanding production. Chinese manufacturers reportedly hold enough lithography machines for three to four years of expansion. Reports of large distributor inventories, which we have not verified, raise another risk: distributors could sell down stock accumulated in anticipation of shortages, adding supply and putting further pressure on prices. We hold $LRCX for manufacturing equipment, $RMBS for memory interfaces, and $SNDK for storage and high-bandwidth flash. These give us several ways to benefit from growing data demand without relying entirely on high memory prices.
@leevalueroach

Lee Roach on X

Monroe $MNRO is selling off on a weak Q2, down around 9% premarket. I think most of the market is reading the headline and missing what's buried in the new credit agreement. The Oct 23 refinancing with Ares ($250M term loan + $125M revolver, EX-10.23) runs well over 100 pages. Deep in the definitions is a "Permitted Change of Control" clause, and it's very specific: - One sale to a private-equity sponsor can happen without triggering a default - It must happen by Oct 23, 2027, a 12-month window - The sponsor needs $1.5B+ AUM, can't be on a disqualified-firm list that Ares and Monro pre-agreed, and must be in an approved jurisdiction - Pro forma lease-adjusted leverage must be 5.50x or less - Sponsor equity must be at least equal to all funded debt, including finance leases - Lenders get a 0.50% fee, and the sponsor can add back up to $2M/yr of management fees Lenders don't negotiate a provision this detailed (a named AUM floor, a pre-agreed blacklist, a fixed window) for a scenario nobody is considering. Meanwhile the board's strategic review, which includes a possible sale, has been open since May. None of this means a deal is coming. No transaction has been announced, and the same agreement also restricts the dividend and adds real interest cost. But headline-driven selling is pricing Monro as a standalone story. The credit agreement says the lenders are planning for a sale to PE and that deal is close.

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