Stock Bargains in the Solar Scrap Heap; PV stocks hit hard

I always caution that I am not publishing buy recommendations but rather suggesting companies that individual and professional investors may want to research further. The oil price shock lessons of the early 70s OPEC crisis are lost on today's media-addicted generation, who repeat their folly in tight cycles. The foolishness of "greed is good" prevails, the manipulation continues, and as the poor get squeezed out at the bottom, the rich begin to load up for the wild ride.

The coming Obama Gravy Train will likely run from next week when the month end rally will start forming, through the tax-loss selling of early December, into the year-end rebalancing and January rebalancing that will shift global capital into equities, then carry on through 2009 before reaching a temporary peak in the spring of 2010; at least that is a scenario that history suggests is plausible.

So who will be the stars of this rally? Some are yet to be known, but you can make a case that clean energy stocks will be among market leaders. Here are some significant solar energy companies that have been hit hard by the twin terrors of falling oil prices and falling stock markets, both of which could easily reverse in the near term.

Joe Trainor
PVintell.com


Solar Energy Stocks Down More Than Two-Thirds

Quotes as of November 12th, 2008


JA Solar JASO

The stock plummeted further today on the quarterly earnings report and 4th quarter forecast, but you'd think investors would have already discounted the $100 million Lehman Brothers writedown.

At $2.38 a share and market cap of $400 mil, eqivalent to about two quarters of revenue, many seem to think this one is terminal, while the problems may well be temporal. An established global customer base leaves them well positioned for any global economic upturn. The stock is down from $27.



Yingli Green Energy YGE

At $4.18 this China-based producer of polysilicon ingots and wafers, PV cells and PV modules now has a market cap of 530 mil, about two quarters of revenue. YGE’s end-products include PV modules and PV systems. The stock is down 90% (from 41.50) but with customers in the USA, Europe and around the world, the future for Yingli may still be bright.



SunPower SPWRA

The stock was smashed mercilesslessly last week after the firm announced its earnings could be adversely affected by a rising US dollar, as if that was an inevitability considering the pristine and prudent state of Washington's finances, and then got caught again in the general correction this week. At 24.72, the shares are down from 144.49, but the market cap of 2.12 bil is valued at almost 3 times last year's revenue and 30 times earnings. San Jose company still has big potential.



LDK Solar LDK

Major supplier of multicrystalline solar wafers to the global photovoltaics energy industry. With the shares at 13.12, down from 75.65, there seems to be a belief that the entire solar electricity sector is down for the count, but here's another view. Even as silicon is eclipsed by thin film, and concentrated photovoltics also enters the fray, each of the 3 generations of solar electric technology will find its own niche and continue to exhibit double digit growth. If the solar electric pie of annual revenue were to grow from ten billion to a hundred billion over the next seven to eight years, there will be room for a wide variety of technologies and management teams. LDK is worth looking into ... they may no longer grow at 300% per year, but that's no longer required.



MEMC Electronic Materials WFR

Silicon wafer producer has diverse customer base and steady revenue growth. How often do you get a chance to buy quality companies like St. Peters, MO-based WFR at 80% off the 52 week high? Perhaps once, maybe twice per decade, and if history repeats as she so often does, then the November 2008 lows for alternative energy stocks will seem like some of the best bargains in the history of growth stock investing. At 15.02 (down from 96) the market cap is 3.37 bil, less than twice last year's revenue.



Q-Cells 555866

At 20.52, the shares are off around 80% from the high of 101.15. High quality German solar power company is major player in silicon photovoltaics.



Energy Conversion Devices ENER

An American tale, a quality diversified technology company with solar photovoltaic and high performance battery products. At 25.92, down almost 70% from high of 83.33.



First Solar FSLR

At 110.06 FSLR stock is off two-thirds from the high of 317. Number one company in top solar power sector: photovoltaic thin-film solar energy.