When we last took a look at smallcap solar power stocks in early 2009, they were in the dumps, the victims of a slumping global economy. Today, many of them have rebounded strongly in the second quarter in tune with the economy, at least for the moment. No doubt President Obama’s stimulus package, which included a 30 percent tax credit for utilities, helped bring the industry some life.
But some fear trouble ahead. Indeed, TheStreet.com posted an article Aug. 11 about the potential of a “Solar Pricing Squeeze ” (http://www.thestreet.com/_yahoo/story/10832669/1/is-the-solar-pricing-squeeze-just-ahead.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA) after investors sold off shares of Shanghai-based JA Solar (Nasdaq: JASO, http://www.jasolar.com) on Aug. 10 despite the fact that management was upbeat about the remainder of 2011 and raised its shipment guidance. The share price, which has been as high as $6.95 this year, dropped into the mid-$5 range this week.
Eric Rosenbaum, the author of TheStreet.com story, noted that for whatever reason, “solar stocks attract the most short-term minded of investors” who can trade in and out of the various solar companies and reap quick gains.
JA Solar is a true smallcap (about $897 million market cap) but the scare seemed to hit the bigs as well. Tempe, AZ-based First Solar (Nasdaq: FSLR, http://www.firstsolar.com), with a market cap of $10.7 billion, also was getting slammed mid-week, down $4.52 (3.5 percent) early Aug. 11 in the midst of a very down day overall throughout the market.
Merrimack, NH-based GT Solar International (Nasdaq: SOLR, http://www.gtsolar.com), which manufactures the equipment for making solar modules, was down mid-week also to about $7.85. But this stock traded at $4.45 when we last checked in the spring of 2009. It has been as high as $8.23 in the past 52 weeks.
China-based ReneSola Ltd (NYSE: SOL, http://www.renesola.com), with a market cap of $636 million, plunged more than 8 percent Aug. 11 to $737. Still, that is a much better price than the $2.56 per share when we last checked.
Marlboro, MA-based Evergreen Solar (Nasdaq: ESLR, http://www.evergreensolar.com), a pure solar play, continues to limp along at $0.65. The stock received a nice lift on Aug. 3 based on its second quarter results showing revenues of $84.5 million, up 7.7 percent over the first quarter. But issues with its Chinese manufacturing unit and foreign monetary exchange losses apparently continue to plague its bottom line.