Friday, May 1, 2009

The Sun Shines on Solar Stocks (ESLR,; FSLR; TSL)

That headline is a bit more boosterish than we usually see at MarketBeat but I purloined it for a reason. The solar group might be at an inflection point. From an April '07 post on biofuels:
This industry is going to be tougher to handicap than the auto's were between 1895 and 1925:

"Various lists of automobile producers have been compiled. The most inclusive is a list compiled by Carroll and Hannan [1995] from the Standard Catalog of American Cars, which attempts to list all firms ever mentioned as involved in the automobile industry. Smith [1968, pp. 183-184] confines his list to firms that manufactured and sold to the general public.

He excludes the few companies that built and exhibited cars for the sole purpose of selling stock, the hundreds of companies that filed for incorporation but failed to advance beyond the paper stage, and the hundreds more that designed a car but never got into production."

(How's that for a footnote! From a wonderful paper by Steven Klepper at Carnegie Mellon)
In 1909 there were over 270 producers!

I think we are starting to sort out the winners and losers.
We saw the $35 runup in First Solar yesterday. Today Tech Trader Daily reports "Evergreen Solar Slides On Weak Q2; Running Out Of Cash".
And for some reason Trina Solar is up 12% today on what will end up being double normal volume. Winners and losers.
Here's the headline story:

The Obama administration wants to recreate President Kennedy’s “space race” in pursuit of alternative energy, and some solar-power and electric-car battery stocks are already rocketing higher.

Shares of lithium-battery makers GS Yuasa of Japan; BYD of Hong Kong; and U.S.-listed lithium producer Sociedad Quimica y Minera de Chile have all more than doubled since their lows around the time of Obama’s election victory. To technicians, that kind of momentum means the stocks are in “strong uptrends.” Caveat emptor: corrections are likely to be extreme, too.

BYD, which is Warren Buffett’s alternative-energy play, has started producing and selling its own hybrid electric vehicle in China for about $22,000 a pop. GS Yuasa supplies Honda Motor with batteries for its electric car.

The beauty of investing in battery companies is the investor doesn’t have to bet on which — if any — electric car will eventually catch on, however.

Obama’s goal to put 1 million plug-in vehicles on the road in the U.S. by 2015 is gravy for companies that are already selling their batteries for more prosaic uses such as mobile phones. There will likely be many false starts in the race toward a “green” car, but a lot of battery power will be expended in the race.

Meanwhile, solar-power companies, one of the hot plays of early 2008, are having another hour in the sun. Both the Market Vectors-Solar Energy ETF and Claymore/MAC Global Solar Energy Index ETF have both halved, then nearly doubled
so far this year. And those are broad ETFs, not single stocks....MORE