Wells Fargo analyst Sam Dubinsky initiated coverage on six Chinese solar stocks, three with "outperform" ratings. Yesterday, the sector was among the worst hit on Wall Street as fear of Greek debt contagion dragged the Dow down -200 points. With benchmarks off again in early trading, it will be interesting to see if Wells' optimism can help draw some bulls back into long-side solar bets.
As a whole, the Chinese Solar Stocks Index has underperformed the S&P 500 by -5.7% over the last month, largely thanks to a -30% decline by Canadian Solar (NASDAQ: CSIQ - News), which cut its margin forecast and revealed overexposure to the sliding euro last month.
On the sector as a whole, Dubinsky noted, "With record unit growth and firmer selling prices, 2010 should be a strong year." However, the analyst warned that a 2011 slowdown could follow as some current demand can be chalked up to the race for solar installations ahead of subsidy cuts. He noted that Trina Solar (NYSE: TSL - News) could offer one of the lowest price points on the market, and ReneSola (NYSE: SOL - News) was a beneficiary of demand trends, according to coverage by Reuters. These stocks and Solarfun Power Holdings (NASDAQ: SOLF - News) all received "outperform" ratings.
Meanwhile, Canadian Solar, Suntech Power Holdings (NYSE: STP - News), and Yingli Green Energy (NYSE: YGE - News) were all started at "market perform" at Wells. Suntech is also a sector laggard over the past month, slipping by -8% as of Tuesday's close.
Despite recent volatility, ReneSola, JA Solar (NASDAQ: JASO - News), and China Sunergy (NASDAQ: CSUN - News) have all managed to stay positive over the past five sessions, as has domestic giant First Solar (NASDAQ: FSLR - News) after topping first-quarter earnings estimates last week. It will be interesting to see how traders react to the analyst upgrades, which often fail to predict near-term performance in the volatile sector.
I think it's a smart play Ditzl, and if there is enough time between earning's dates, a profitable play. Have questions about YGE as well but the FIFA deal isn't one of them. Advertising is not a bad thing and since it is watched worldwide, good exposure. Just might pay off. Good luck with it.
No I didn't think you were "toying" with Brace, I believe what you posted. Jaso is a good play, but don't forget this (just repeating)
The results of the survey asking TheStreet alternative energy investors which solar companies' earnings would provide the biggest jolt to share price seems to reflect two trends, pricing power in solar as demand crests, and the recent underperformance of shares like Yingli Green Energy positioning the company for a rally on its earnings. Which brings us, finally, to our results: More on YGE Clean Edge Stock Indices DownChina Clean-Tech Stocks: Sustainable GrowthCloudy Forecast for Solar Sector Market Activity Yingli Green Energy Holding Company Limited| YGE DOWNFirst Solar Incorporated| FSLR DOWNJA Solar Holdings Company Limited American| JASO DOWNApproximately 25% of solar investors in the survey audience think that it will be Yingli Green Energy that experience the biggest earnings rally. Notably, Yingli's share price has not recovered at all this year, even as many solar shares have risen as fears of a worst-case scenario in Germany ebbed and the demand forecasts started coming in much higher than expected. Yingli's shares today are more or less exactly where they were -- between $12 and $13 -- after a huge selloff in Yingli shares from a 2010 high above $18 in January. Thus, readers seem to think Yingli is the sleeping earnings giant, ready to pop, even though there are still widespread fears among the analyst community that Yingli's ramp-up of its polysilicon plant will continue to cut into its short-term earnings power