The frenzy that surrounds the earnings season has died down, but investors can still get their fix with individual names, some of which have seen wild swings in advance of quarterly releases.
Wednesday, China-based Solarfun Power Holdings Inc., which trades American depository shares on the Nasdaq Stock Market, will report earnings before the opening bell. The stock fell 5% Tuesday, following a run-up that began amid strong reports from other solar industry companies.
China Sunergy and Suntech Power both posted strong earnings last week. “There might be some optimism that the trend will continue with Solarfun,” says Frederic Ruffy, options strategist at Whatstrading.com. The company is expected to report earnings of 1.47 renmimbi a share on 1.25 billion renmimbi in revenue, according to the six-analyst consensus as reported by Thomson Reuters.While the stock declined a bit Tuesday, trading in the options market indicated optimism among investors, as more than 7,000 out-of-the-money call options...MORE
Meanwhile, in another part of the empire, one of Mr. Gaffen's confreres reports:
Solarfun: Analyst Says Premium P/E “Hard to Justify”
Collins Stewart analyst Daniel Ries today launched coverage of solar cell producer Solarfun (SOLF) with a Hold rating.
Ries writes in a research note that he is “impressed qualitatively and quantitatively with developments at SOLF over the past year,” as it made changes in senior management, expanded its customer base, improved working capital management and capital efficiency and launched a strategy to integrate ingot and wafer production into its operation. But he also says that given its current valuation, he’s not recommending purchase. Trading as of yesterday’s close at 13.7x FY 2009 estimate EPS, he notes, the stock trades at a substantial premium to the average 10.5x multiple for its peers. The premium, he says, “is hard to justify.”>>>MORE