These Solar Stocks Will See Higher Profits on Lower Solar Power Costs

Echoing other areas of technology, the costs associated with manufacturing solar panels have declined as the technology has improved.  The Financial Times is reporting today that costs have dropped 60% in the past five years.  Despite lower costs squeezing operating and profit margins at solar power companies, declining costs suggest that the potential market for solar power will increase.  That should improve the top line of solar companies, and thus increase the bottom line.  The decline in costs comports with famed futurist Ray Kurzweil’s argument that solar power will replace most other forms of energy in 20 years’ time.

What does this mean for the companies currently operating in the space?   Following is some information on solar power companies:

  • First Solar, Inc. (NASDAQ:FSLR): The stock has traded in a 52-week range of $102.50 to $175.45 and most recently traded at $115.35.  Its market capitalization is $9.94 billion.  Its PEG ratio is 0.61, its price-to-sales is 3.65, and its price-to-book is 2.76,.  About the company:  First Solar, Inc. designs and manufactures solar modules.  The Company uses a thin film semiconductor technology to manufacture electricity-producing solar modules. Competitors to Watch: SunPower Corporation (NASDAQ:SPWRA), Suntech Power Hldgs. Co., Ltd. (NYSE:STP), Trina Solar Limited (NYSE:TSL), General Electric Company (NYSE:GE), Yingli Green Energy Hold. Co. Ltd. (NYSE:YGE), MEMC Electronic Materials, Inc. (NYSE:WFR), Evergreen Solar, Inc. (NASDAQ:ESLR), Energy Conversion Devices, Inc. (NASDAQ:ENER), DayStar Technologies Inc. (NASDAQ:DSTI), and Ascent Solar Tech., Inc. (NASDAQ:ASTI)
  • SunPower Corporation (NASDAQ:SPWRA): The stock has traded in a 52-week range of $9.61 to $22.60 and most recently traded at $21.21.  Its market capitalization is $2.05 billion and it earned $1.62 per share last year.  Its PEG ratio is 0.42, its price to sales ratio is 0.89, and its price to book ratio is 1.26.  About the company:  SunPower Corporation is an integrated solar products and services company that designs, manufactures and markets high-performance solar electric power technologies.
  • Suntech Power Holdings Company (NYSE:STP): The stock has traded in a 520week range of $7.05 to $11.41 and most recently traded at $7.42.  Its market capitalization is $1.34 billion, and it earned $1.36 per share last year.  Its PEG ratio is 0.65, its price to sales ratio is 0.42, and its price to book ratio is 0.71.  About the company:  Suntech Power Holdings Company Ltd. produces solar cells.  The Company designs, develops, manufactures and markets a variety of photovoltaic cells and modules.  Suntech Power is based in China.
  • Trina Solar Limited (NYSE:TSL): The shares are trading in a 52-week range of $16.08 to $31.89 and most recently traded at $19.11 per share.  Its market capitalization is $1.34 billion and it earned $4.13 per share last year.  Its PEG ratio is 0.33, its price to sales is 0.67 and its price to book is 1.13.  About the company:  Trina Solar Limited manufactures solar-power products including photovoltaic wafers, ingots, cells and modules.  The Company’s solar modules produce environmentally-friendly electric power for residential, commercial, industrial, and other applications worldwide.
  • LDK Solar Co. Ltd. (NYSE:LDK): The shares have traded in a 52-week range of $4.97 to $15.10 and most recent;y traded at $6.90.  Its market capitalization is $1.01 billion and it earned $2.27 per share last year.  Its PEG ratio is 011, its price to sales ratio is 0.38, and its price to book ratio is 0.86.  About the company:  LDK Solar Company, Ltd. manufactures multicrystalline solar wafers. The Company sells multicrystalline wafers globally to manufacturers of photovoltaic products including solar cells and solar modules.  Solar wafers are the principal raw material used to produce solar cells which convert sunlight into electricity.
  • Yingli Green Energy Holdings (NYSE:YGE): The shares have traded in a 52-week range of $7.66 to $14.29 and most recently traded at $7.86 per share.  Its market capitalization is $1.23 billion and it earned $1.53 per share last year.  Its PEG ratio is 0.33, its price to sales ratio is 0.59, and its price to book ratio is 0.92.  About the company:  Yingle Green Energy Holding Company Limited designs, manufactures and sells PV modules.  The Company also designs, assembles, sells and installs V systems that are connected to an electricity transmission grid or those that operate on a stand-alone basis.
  • MEMC Electronic Materials (NYSE:WFR): The shares have traded in a 52-week range of $9 to $15.04 and most recently traded at $9.01.  Its market capitalization is $2.08 billion and it earned $0.17 per share last year.  Its PEG ratio is 0.59, its price to sales ratio is 0.83, and its price to book ratio is 0.90.  About the company:  MEMC Electronic Materials, Inc. produces silicon wafers.  The Company’s products are used in computers, telecommunications equipment, automobiles, consumer electronics products, industrial automation and control systems, and analytical and defense systems.  MEMC operates manufacturing facilities in Italy, Japan, Malaysia, South Korea, Taiwan, and the United States.
  • Canadian Solar, Inc. (NASDAQ:CSIQ): The shares have traded in a 52-week range of $8.25 to $17.63 and most recently traded at $9.33.  Its market capitalization is $400.32 million and it earned $1.26 per share last year.  Its PEG ratio is 0.30, its price to sales ratio is 0.25, and its price to book ratio is 0.72.  About the company:  Canadian Solar, Inc. designs, manufactures, and sells solar module products that convert sunlight into electricity for a variety of uses.  The Company’s products include a range of solar modules for use in a wide range of residential, commercial, and industrial solar power generation systems.
  • JA Solar (NASDAQ:JASO): The shares have traded in a 52-week range of $4.22 to $10.24 and most recently traded at $5.185.  Its market capitalization is $850.26 million and it earned $1.80 per share last year.  Its PEG ratio is 0.32, its price to sales ratio is 0.41, and its price to book ratio is 0.77.  About the company: JA Solar Holdings Company Ltd. manufactures solar cells.  The Company sells its products principally to solar module manufacturers, which assemble and integrate its products into modules and systems.

(Note: selected financial data are sourced from Yahoo! Finance and are assumed to be accurate.)

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