Solar Stocks on the Move: 3 Winners and 2 Losers
It’s been a big week for SolarCity Corp. (NASDAQ:SCTY), the solar panel installation company that launched its IPO just last month. This company has gained a lot of attention in the solar industry, but not because it’s a competitor to the existing manufacturers.
SolarCity leases and installs residential and commercial solar panels, and has so far kept its hands out of the manufacturing game. This means it avoids most of the maladies that have plagued the industry over the past couple of years. Investors have been generally bullish on the stock since its IPO, bidding it up nearly 30 percent.
Shares only climbed about 4.5 percent over the past five trading days, but the company won a sterling badge of approval from Jim Cramer. The pundit reversed his previous skepticism on the stock and now considers it a “Buy.”
Trina Solar Limited (NYSE:TSL) is down in the dumps this week, getting mauled by bears and short sellers. The stock is off over 8 percent, but a couple of analysts see the dip as a good excuse to buy in. Analysts at Nomura see as much as a 40 percent upside for Trina and JA Solar Holdings (NASDAQ:JASO), which is off over 3 percent this week.
Nomura believes that the industry has room to grow on a platform of Chinese infrastructure spending that includes heavy solar subsidies. Combined with the expected reversal of overcapacity trends, these Chinese solar stocks could see a 2013 rally. Both companies are expected to deliver more shipments this year than last, having landed substantial stakes in large Chinese solar projects.
Nomura gives both companies a “Buy” rating.
However, Nomura doesn’t care for Suntech Power Holdings (NYSE:STP) or LDK Solar (NYSE:LDK), both big losers on Friday. Suntech has been plagued by high costs and has seen its market share slide recently, while LDK is saddled with so much debt it’s unattractive.
In a world where pretty much every solar company is logging negative earnings, Suntech and LDK are losing money faster than their competitors. LDK has a trailing-twelve-month EPS of -$9.17, while Suntech clocks in at -$6.55 for the period. Trina Solar all but danced through the last twelve months with losses of just $3.73 per share.
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