Last time First Solar shares (FSLR) dipped down to $115-$120, I bought ‘em and rode them up for a 25% gain (sold because needed the money, not because I’m a trader).
Clean Energy (whether solar, wind, biofuel, etc) long term is necessary and experiencing exponential growth on the whole. As oil prices rise into the triple digits, more and more this sector will come back into focus. While I’m not a technical trader, I will say that the last time in September when FSLR dipped to 120, it was on low volume followed by a high volume rebound. Today’s volume was roughly 3 million shares, or 3/4 the average volume of the last 10 days. Sure, the stock may lead lower, but technicals tell me that this is far from a panic sell off (Captain Obvious, I know). Also, we have around 21% short interest, which means lots of short sellers and ripe for a short squeeze in the near term. On the negative side, FSLR has been hit by a few downgrades, including my Credit Suisse telling me they have a $115 price target. Wall Street is short sighted though- 32% ROE, 25% ROA, 29% ROIC tell me that this is a QUALITY company. The Company is selling for a trailing twelve month P/E ratio of 16x, while the company is growing and has the potential to grow so much faster than that.
The Bottom Line
At these prices I bought a good sized block, and if it goes down any further, say $100-110, I’ll buy some more. Can’t go wrong with best of breed solar with the numbers to back it up. This is great value in my opinion if you’re looking for quality clean energy at a discount.
Disclosure: I am long FSLR . I am not a financial advisor and the above is solely my opinion, NOT advice. Do your own research and contact a financial professional for help if necessary. My opinions do not take into account your specific situations or needs.
additional disclaimer- I'm a horrible short term trader. This is best for someone with long term leanings, as I wouldn't be surprised if it goes lower for a bit. Calling a bottom is not an art that few can master- it's a game that anybody can get lucky in once in a while.