JA Solar, a long time favorite, has recovered my line in the sand: IPO support/resistance at $5.5. Things are looking good for JASO, I could see it hitting $12 easily. Beware earnings are coming up on the 12th but I think risk is limited, note the S&P upgrade today:
"“We expect strong earnings growth over the near-term,” he writes, “while the price of the shares has fallen notably based on various concerns such as margin pressure and the potential need for capital for expansion.” He notes that the stock trades for under 4x his 2009 EPS estimate of $1.50 a share. Montevirgen, however, slashed his price target on the stock to $9 from $20."
I'd also note that Sun Power quietly posts blowout results during the market chaos of recent weeks. SPWR is another one of my favorite solar stocks as its the leading producer of Silicon based cells in the US.
I recently posted about FSLR looking great as well.
What I hear many traders talking about right now is the potential for an Obama election to boost certain stocks and solar is cited as a prime cannidate. While I would guess this is already priced into solar stocks, long term Obama seems to be very serious about subsidising solar. Whether or not you agree with the politics of it, US photovoltaic producers could see some greener pastures ahead.
"Finding the new driver of our economy is going to be critical. There is no better potential driver that pervades all aspects of our economy than a new energy economy ... That's going to be my No. 1 priority when I get into office, assuming obviously that we have done enough to just stabilize the immediate economic situation." -Obama
Disclosure: I own JASO and SPWRA calls.
2 comments:
Bummer on the JASO drop today. I don't own any of its stock, but I do own SOL. I'm hoping they manage to release above estimate earnings next week. But who knows...Things looked fairly gloomy today in solar. High volume, red. What are your views on a rebound?
Hey Panda,
Yeah, JASO and most other solars are broken stocks. It will take a long time to fix the technical damage that has been done or conversely, for confidence to return to solar investors (like us).
After JASO lost $5.5 the second time that pretty much put the nail in the coffin from my perspective. Earnings today just confirmed what the market had been telling us for months. Solar stocks are reacting to the perception that fossil fuels are going to be cheap for a while and a weak global economy is going to put environmental concerns on the back burner.
I am still fully confident in the future of solar and I am investing more than just my investment capital in this belief. I plan to work in the industry in a few years after completing my phd and I expect solar to be THE leader in the next great bull market. However, in the short/intermediate run it is going to be very hard for these stocks unless oil rebounds.
There are tremendous long term opportunities here but as long as oil keep getting killed so will the solar stocks.
Good luck with SOL earnings next week Panda.
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