Wednesday, October 15, 2008

Trina Solar is Leaving the Rut (^RUT; TAN; TSL)

One of the things we watch is relative performance of individual issues vs. ETF's of their industries. So, apparently, does 1440 Wall Street (see below). With the solars we use the Claymore/MAC Global Solar Energy Index ETF (TAN). As most of the solar stocks are smaller caps (some much smaller than they were three months ago!) we also compare them to the Russell 2000.

Here's a five-day chart of the relative performance from Yahoo Finance:

Chart for Claymore/MAC Global Solar Energy (TAN)

and here's a snippet from 1440 Wall Street:

Solar Power International 2008 Meets the Credit Crunch

...The management teams of nearly every publicly traded comp are in town and [ThinkPanmure] analyst Jonathan Hoopes can plug you in to their current line of thinking:

We are in San Diego attending Solar Power International 2008. We had meetings yesterday with Samuel Yang (CEO of JA Solar) and Terry Wang (CFO of Trina Solar). These cell and module vendors expect margin expansion in 2009 as they believe polysilicon raw materials costs will fall faster than ASPs although both acknowledge that they would restructure "take or pay" contracts if market pricing demanded it. Moreover, both were confident that financing will flow into the sector and each pointed to Asian banks and other sources of capital as backstops if U.S. & European lending becomes constricted. As for downstream integration into solar power plants and electricity generation, JA Solar is aggressively exploring this option while Trina in wait-and-see mode.

ASPs Unlikely to Fall More than 20% in 2009...

...If you missed the run in these stocks and were waiting for the froth to blow off you might soon have your chance. The Claymore/MAC Global Solar Energy ETF (TAN-NYSE) has bounced from its recent life of ETF/contract lows, but you don’t have to gamble on its next move. Pick the solar winners and short the TAN in a pair trade...valuations in some of the stocks might even attract value investors....MORE (worth the read)