Solar Stock Winners Hard to Find following Tariff News on Chinese Solar Panels

For the U.S.-based solar power industry, the news on May 17 was what many panel manufacturers had been looking for: the U.S. Commerce Department announced it was slapping a high tariff on solar panels from China (

While it was certain to “infuriate” Chinese officials, according to the New York Times, just how good the news was for the industry was hard to tell. More importantly for our blog, what does this decision to impose antidumping tariffs of more than 31 percent on solar panels from China mean for solar stocks? Based on the early reactions of the stock market and the fact that the overall market has been hit so hard in recent days, the results are difficult to read.

First, however, some of the fine print. This is a preliminary decision , not set in stone, and it won’t actually go into effect until October, if at all. There is some talk that it would be retroactive to February 2012, however.

Second, solar panel manufacturers based in Taiwan, like AU Optronics Corp., which has become a big player in the thin film solar panel business, won’t be affected. Third, some of the Chinese manufacturers like Trina Solar (which has moved its manufacturing outside of China and won’t be affected) and Yingli announced that their retail prices would not be affected by the tariff. So it will be interesting to watch what the Commerce Department actually does, what it all actually means and how the market reacts.

In the meantime, here are how some randomly chosen solar stocks closed on Friday, May 18, a day after the news broke. If there were real winners, like U.S.-based First Solar and SunPower, it was hard to tell by stock price.  Most of the China-based companies took an initial hit, but then stabilized.

Tempe, AZ-based First Solar (Nasdaq: FSLR,, which specializes in thin-film solar modules, continues a drastic slide that began a year ago. Many insiders say their costs are  just too high and margins too low to stop the decline. FSLR, which traded as high as $142 last summer, has fallen all the way down to small cap territory. It closed May 18 at $13.66, down $1.26 for the day. It’s market cap is only $1.2 billion.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, ), which sells a variety of solar products, has seen its stock price stabilize since December. Last summer CSIQ traded for over $12 but by late August it had dropped to about $6.75. It closed May 18 at $2.70, down 25 cents on the day. Market cap is now $117 million.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR, makes a wide variety of solar products and systems. Like the rest of the industry, SPWR stock is now trading near the bottom of its 52-week range ($4.94-$23.36) and its market cap has dropped to $601 million. SPWR closed May 18 at $5.08, down 51 cents on the day.

China-based Suntech Power Holdings (NYSE: STP,, makes photovoltaic products and provides construction services. STP stock tanked on the news, tried to rally back briefly early in the day May 18, but ultimately closed at $2.00, down 13 cents on the day.

China-based LDK Solar Co. (NYSE: LDK, manufactures solar products and silicon materials. LDK, which was trading for nearly $5 in late December, closed May 18 at $2.85, down 6 cents on the day. Its 52-week range is $2.54-$7.90 and its market cap is $373 million.

China-based Trina Solar Ltd. (NYSE: TSL, designs, manufactures and sells photovoltaic modules worldwide. It has a chart similar to many of the other solar stocks, which reached highs last summer but have been sliding for the most part since. It closed last Aug. 31 at $15.88 and by Dec. 23 it had dropped to $7.39. It closed May 18 at $5.70, down 38 cents on the day. Market cap is now $464 million.

China-based Yingli Green Energy Holding Co. (NYSE: YGE, makes photovoltaic products including cells, modules and systems. YGE’s 52-week range of $2.75-$9.85 and its market cap is now $396 million. Like most of the other solar stocks, its best days were last summer. It closed May 18 at $2.52, down 28 cents on the day.


There’s Gold in Them Thar Hills, Podner! $1700 Gold!

Some years back I bought a gold Panda coin on a chain for my wife, who had visited China on a US State Department-sponsored singing tour — she had fallen in love with China.  She wore that coin for years, and it is the only gold “investment” we ever made.  I think I paid a couple hundred dollars for it.  Now that one-ounce coin would be worth considerably more, with gold over $1700 per ounce.  So I am tempted to have a look at gold mining companies.  When you survey gold mining companies in the smallcap arena, however, it can be daunting.  First of all, there are a lot of them, so the sorting process is potentially longer.  But mostly the problem is wading through the manic “buy it TODAY” recommendations by a clutch of get-rich-quick websites, many of which have names similar to ours.  Those websites tend to have lengthy disclaimers that disclose in very small print that the writers have been paid by such-and-such company to write newsletters, “research” and recommendations.   That’s a problem.

Just to be clear, we do NOT make recommendations on buy-sell-hold; we write about companies that seem interesting to us, and we trust YOU to do your own research.  And further, we have no relationships with the companies mentioned in this article.

Las Lagunas mine, Dominican Republic, courtesy PanTerraGold website

But the gold rush seems genuine, even if there are charlatans scattered here and there.  Here is an article from a Barron’s blog that points out why it’s worth doing the work:  Keeping in mind that the market overall is doing well so far in 2012, apparently gold and silver are doing even better.  At least one commentator thinks that the amount of gold being mined may go to alltime highs:

And here is Yahoo! Finance’s equally optimistic take on gold ETFs:  But of course we don’t follow ETFs.  We like to look at smallcap equities.  So here are a few that we found interesting.  It is not a scientific look at the market, and there are probably oodles of companies we did not look at.  But perhaps it is a beginning for someone who wants to find out what’s going on.

Actually the first company that caught our attention is a silver-mining company that finds gold as a by-product.  Vancouver BC-headquartered Endeavour Silver Corporation (NYSE: EXK; ) has Mexican holdings in Durango and Guanajuato.  They anticipated producing 3.7 million ounces of silver in 2011, up from 3.3 million in 2010, and something more than 17,000 ounces of gold.  EXK also trades in Frankfurt and Toronto.  On the NYSE it is priced at about $11.11, vs a 52-week high of $13.10, for a market cap of about $968 million, on average daily volume of about 1.7 million shares.  Its general prominence probably means it is well-watched, and here are two very recent SeekingAlpha articles: and  But, like I said, it is only a gold miner as a byproduct.

Medusa Mining Ltd is based in Como, Western Australia (ASX: MML;  It is guiding investors that it will produce about 75,000 ounces of gold in its Philippine operations in its fiscal year ending June 2012.    Simple math would put that at a value of about $130 million.  They believe they can be producing 400,000 ounces per year by 2015.  According to their most recent quarterly report (, they have about $80 million in cash and bullion on hand, and they pay a cash dividend of about $0.05 per share.  Shares sell for $6.01 on the ASX, with average daily volume over 1.1 million shares for a market cap of about $1.1 billion.  Interestingly for a fast-growing company, the company’s PE is only about 10.  Feb 13 update:

Toronto-based McEwen Mining (NYSE: MUX; is a heavily traded gold, silver & precious metals company with operations in Nevada and Mexico.  It is an amalgamation of several companies, most notably US Gold (see the domain name), and it has been trading more than 3 million shares a day on the NYSE, closing recently at $5.33 for a market cap of about $750 million.  They are looking at revenue of $500 million in 2015, according to this SeekingAlpha enthusiast:

If you want to look smaller and earlier-stage, PanTerra Gold Ltd might be interesting.  Headquartered in New South Wales, Australia, the company’s shares trade on the ASX under ticker PGI.  The company is in process of acquiring a Vancouver BC gold miner, Novus Gold (  Its principal gold field is in the Dominican Republic, in the mountains not far from the border with Haiti.  Shares trade on the ASX at about $0.17, and the volume is about 1.4 million shares per day.  It seems likely that the shares will be co-listed on the TSX shortly, with the acquisition of Novus.  PanTerra is mostly pre-production, but its assays and leases are strong.  It also has interests in Ecuador.  Clearly a good bit riskier than Medusa, but that is obviously factored into the lower price.

Concord NH-based Jaguar Mining Inc (NYSE: JAG; produced a record 156,000 ounces of gold in 2011, according to their preliminary 2011 report (, up 13% from 2010.  Its mines are in Brazil. There have been offers of a buyout by China Shandong Gold, and speculators have been circling the company’s shares (  That’s good news for people whose blood pressure is under control, and many investors like the idea of an early exit. The Shandong offer in November was for $9.30.  Currently shares are trading at $6.82 on volume of about 240,000 shares per day, for a market cap of about $576 million.  The shares also trade on the TSX.

Halifax-headquartered Brigus Gold Corp (Amex: BRD; operates mines in Ontario and in the Dominican Republic.  In the ramp-up phase, Brigus anticipated that it would produce about 14,000 ounces of gold in the 4th calendar quarter of 2011 (  That would be down from 2010 levels, due to apparent problems in the underground mine.  Management believes it will be able to remedy the problems.  Shares are selling for about $1.10, vs a 52-week high of $1.99, on average daily volume of about 850,000 shares.  Market cap is about $216 million.

Finally, if you fancy early-stage opportunities, have a look at Saskatoon-based Golden Band Resources (TXV: GBN and OTCQX: GBRIF;  Their claims are in northern Saskatchewan, giving them the distinction of being one of the only gold mining companies we could find whose headquarters were anywhere near their claims and operations.  They call themselves Saskatchewan’s newest gold producer.  With a gold sales figure of about $35 million for the six months ended October 31, 2011, the company is profitable by a whisker at $0.01, but its balance sheet at Halloween was upside down, with liabilities far higher than assets (they subsequently raised another $9 million in debt).

“All that glisters is not gold,” as Portia says in The Merchant of Venice.  Gold mining is interesting, the price of gold is high and shows no sign of crashing — just do your homework, and remember that there are probably hundreds of these companies.  Most of them are on the up-and-up, but you owe it to yourself to learn as much as you can before spinning the wheel.

Reverse Mergers Gaining Headlines…and SEC Scrutiny

Reverse mergers, a means by which a private company can buy the shell of a defunct public company to gain quick access to public markets, have been all over the news lately, due largely to some questionable Chinese companies that have used these transactions. According to the Wall Street Journal, the Securities and Exchange Commission recently issued “an investor bulletin” warning of instances of fraud and abuse connected with many of these reverse merger companies (, not all of them Chinese.

The Journal notes accounting irregularities have prompted the SEC to begin an investigation targeting reverse mergers. At the same time, many of the trading markets have tightened listing requirements and major online brokerages have raised margin requirements for trading shares of companies that have gone public through reverse mergers.

Reverse mergers and Chinese stocks were also the focus of two stories in Barron’s this week. One of the stories covered New York Global, a company that promotes Chinese stocks, many of which have been created through reverse mergers. The writer, Leslie P. Norton, has written on the topic before and makes her conclusions clear: “Much of the universe of Chinese reverse mergers has become a swamp of revenue disappointments, earnings restatements and some outright frauds…” She adds that Bloomberg has a reverse merger index, which “has collapsed.”

No one is saying all companies that went public through a reverse merger are to be avoided. No doubt there are some upstanding reverse merger companies out there. But the gist of the recent articles seems to be–buyer beware.

Here are some of the Chinese stocks noted in the Barron’s article:

Bodisen Biotech (OTCBB:BBCZ,, a tiny fertilizer and insecticide manufacturer (market cap about $8 million) that was delisted by the AMEX four years ago, according to The company, which was trading for $0.41 mid-day June 23, has been bashed by several journalists in the past few months but still managed to hit $0.90 in late April. It’s daily volume is about 19,000 shares a day.

SmartHeat Inc. (Nasdaq: HEAT,  manufacturers and sells plate heat exchangers used for heating and airconditioning and several industrial applications. Barron’s noted that its stock price is down 78 percent in the past year. At mid-day June 23 HEAT was trading at $1.37, down 6 cents for the day. But trading volume is typically heavy, averaging about 723,500 shares each day.

CleanTech Innovations (OTC: CTEK.PK, manufactures and sells towers for wind turbines. It is currently appealing its delisting by Nasdaq in March, according to Barron’s, and now seems to trade only by appointment. At mid-day June 23 it had not yet opened and its stock price remained $1.73. High for the year was $9 when times were apparently much better back in November.

Deer Consumer Products (Nasdaq: DEER, manufacturers small electronic kitchen appliances. While its stock price is down more than 50 percent this year, according to Barron’s, it trades strongly (nearly 520,000 shares a day) and actually puts out news from time to time. DEER stock was trading at $7.02 on June 23, off its 52-week low of $4.88 but way down from its high of last fall of $13.

Harbin Electric (Nasdaq: HRBN, manufactures electric motors and has a market cap of about $445 million. The stock has traded as high at $25.05 in the past year, and as low as $5.82. On June 23 it was up 6 cents to $14.23 with more than 1.3 million shares traded at mid-day. It averages about 1.6 million shares traded per day.

Solar Stocks Soar on Success of German Green Party

The surpising success of the Green Party in a German election March 27 sparked an across-the-board jolt for solar stocks March 28, some moving up more than 5 percent. Even smallcap Evergreen Solar (Nasdaq: ESLR,, which has slumped for nearly the entire past 12 months, traded up nearly 4 percent to $1.34.

The Green Party’s success was attributed to the country’s “deep-seated aversion to nuclear power” and the recent earthquake and ensuing tsunami that damaged the Fukushima Daiichi plant has galvanized opposition,” according to the New York Times. Germany is one of the world leaders in solar power innovation and construction and investors apparently saw the advance of the Green Party as evidence that the country would renew its subsidies for the solar industry.

Other smallcap solar stocks on the move March 28 included China-based Renesola Ltd. (NYSE:SOL, up 4.2 percent to $9.38; Canada-based Canadian Solar (Nasdaq:CSIQ, up 2.34 percent to $11.38; China-based Hanwha SolarOne Co, formerly known as Solarfun Power Holdings, (Nasdaq: HSOL, up 4.36 percent to $7.54; and China-based JinkoSolar Holding Co (NYSE:JKS, up 5.3 percent to $26.75.

The midcap and largecap solar stocks enjoyed the day’s trading as well. China-based Yingli Green Energy Holding (NYSE:YGE, was up 5.8 percent to $12.86; Tempe, AZ-based First Solar (Nasdaq:FSLR, traded up 1.9 percent to $153.28; China-based LDK Solar (NYSE:LDK, up 4.1 percent to $11.71; San Jose, CA-based Sun Power Corp. (Nasdaq:SPWRA, up .8 percent to $16.53; China-based Trina Solar (NYSE:TSL, up nearly 3 percent to $28.60

Some Good News for Dry Bulk Shippers: Iron Ore Prices Surging

We’ve talked about the ongoing boom in the mining industry, fueled in part by the global demand for commodities and infrastructure needs, particularly in emerging countries. The latest headlines are focused on the resurgent global demand for iron ore, which is more good news for mining. But it may also be great news for shipping companies, particularly those small cap shippers that specialize in dry bulk shipping.

Iron ore, along with coal and grain, is one of the main cargoes for bulk shippers. In recent years, iron ore has commanded about 24 percent of the dry bulk market largely because it’s the essential ingredient in steel (coal is number two). Steel production is increasing all over the world, including China, and that’s driving iron ore to record prices, according to the Financial Times (

One of the problems holding back many shipping companies today is over capacity, thanks to a shipping boom a few years back that prompted the construction of huge numbers of new ships, many of which are now being delivered. There are simply too many ships chasing cargo loads that are increasing, but not quite fast enough to prevent definitive dips in rates. One key to picking a company not burdened by over capacity is to see if their vessels are chartered long term, rather than relying on rates on the spot market. Also, the Baltic Dry Index is a helpful reference because it tracks global shipping prices of various cargoes.

We’ve picked out four smallcap shipping companies, all that do some dry bulk shipping and all based in Greece. Each of these companies has its own particular issues and should be studied carefully–we’re certainly not promoting them–but they may be worth a look.

Excel Maritime Carriers (NYSE: EXM, has a fleet of 47 vessels including five of the largest ships, called capesize, which often transport iron ore. Its market cap is $391 million and just this week reported fourth quarter net income of $63.6 million, down from $81 million a year ago. Management noted that the delivery of new vessels has led to volatility in the shipping market (hello) and the stock has dipped since, all the way down to $4.87 on March 3. EXM has dropped 19.57 percent over the past year, according to Seeking Alpha, and sits at the bottom of its 52-week range of $4.51-$7.50. Could be the good iron ore news will help.

Top Ships (Nasdaq:TOPS, used to be solely oil tankers but in 2007 jumped into the dry bulk business with five vessels. Its stock has languished at $1 or less for about a year and investors have been critical of management’s decision-making and strategy. Its 52-week stock price range is $.62-$1.30.

Ocean Frieght, Inc. (Nasdaq:OCNF, is another dry bulker struggling to gain traction with investors. The company was hit with a Nasaq delisting notice on January 25 and has 180 days to get back into compliance. It is currently trading at $.75, nearly the bottom of its 52-week range of $.70-$2.67.

Diana Shipping (NYSE:DSX, is a dry bulker with a market cap of $1.01 billion, right at the top of our smallcap range. As of the start of 2010, the company, formerly known as Diana Shipping Investments Corp., had a fleet consisting of 13 panamax dry bulk carriers and 7 capesize carriers. A recent Seeking Alpha post ( calls it the shipping company “that stands out from the crowd” of dry bulkers in part because it generates “an extremely high level of free cash flow,” never a bad thing. The stock is currently trading at about $12.50 and has a 52-week range of $10.75-$15.13.

CAT Calls for Boom in Mining, Mining Equipment, Infrastructure Building

For 2011, expect a boom in mining and infrastructure building in developing countries and a surge in demand for mining equipment prompted by rising commodity prices. These were among the messages delivered in the fourth quarter earnings report  January 27 by Caterpillar, the world’s largest maker of construction and mining equipment based on revenues. Caterpillar (NYSE:CAT), a Dow component that many investors consider an industrial bellwether, expects record profits in 2011 and annual revenues to exceed $50 billion, compared to $42.6 billion in 2011, with net profits to be nearly $6 a share, up from $4.15 in 2010.

That’s the kind of outlook that could help boost a lot of other stocks, perhaps even smallcap mining and mining equipment stocks. We looked at some of these companies back in November.

Chattanooga, TN-based Astec Industries (Nasdaq: ASTE, designs and sells equipment and components used in road building, utility and related construction activities. Its Aggregate and Mining Group segment provides a host of mining-related equipment. The company’s market cap has jumped from $660 million last November to $719 million today. The stock is trading at about $31.78 with a 52-week range of $22-$37.

Vancouver-based Nevsun Resources Ltd. (AMEX:NSU, formerly known as Hogan Mines Ltd. is a natural resource company that mines and produces mineral properties. Many of its properties are based in Eritrea in northeast Africa including a gold, copper and zinc project called the Bisha Property. NSU put out a release January 27 suggesting that progress is being made on the Bisha mine and that “we are on track to be a mid-tier gold producer by the end of this quarter.” Only two years ago this was a 65-cent stock that is now trading for nearly $6.

South Africa-based DRDGOLD Ltd (Nasdaq:DROOY, is purely a gold mining company with assets including underground mines and surface retreatment operations. DROOY, with a market cap of $175.5 million, may strictly be a gold play. The stock is currently trading at nearly $5 and hit its 52-week high of $7.90 about a year ago.

British Columbia-based Polymet Mining Corp. (AMEX: PLM, is a natural resources company with a $314 million market cap formerly known as Fleck Resources Ltd. It owns the Erie Plant, a large processing facility in the mining district of the Mesabi Range in northeastern Minnesota. Earlier this month PLM announced it had closed the $10 million first tranche of a financing with Glencore AG, a Connecticut-based subsidiary of privately-held, Switzerland-based Glencore International AG, a diversified natural resources company. The stock is trading at $2.10, about in the middle of its 52-week range of $1.26-$3.38.

Queensland, Australia-based Industrea Limited (OTCQX: IULTY, is a strong play on the China coal mining sector, which represents 40 percent of the company’s revenue. Industrea comprises a group of companies involved in the global mining products and services business and their products and services are sold in the U.S., South Africa, Russia, Indonesia and Papua New Guinea. Customers include BHP Billiton, Rio Tinto Coal, Anglo American, BMA, Barrick Gold, Vale, Xstrata and several of China’s leading mining groups. To enlarge its global shareholder base, the company has established an ADR listing. A recent report by investment bank Madison Williams notes that investor focus on the recent floods in Queensland has created a buying opportunity. The company’s stock price has climbed 30 percent since the middle of last year.

Following in Caterpillar’s $7.6 Billion Footsteps

“Caterpillar Bets $7.6 Billion on Mining” announced the Wall Street Journal headline above a story November 16 trumpeting Caterpillar’s agreement to buy Bucyrus International, a maker of mining equipment, for $92 a share, a 32 percent premium of Bucyrus’ Friday closing price. Caterpillar is already the world’s largest construction and mining equipment maker and this deal, expected to close in mid-2011, will “significantly expand Caterpillar’s line of mining equipment and double its mining revenue,” according to the Associated Press.

The details of the deal should be eye-opening for smallcap investors following the mining equipment sector. Caterpillar just reporterd a 100 percent increase in profit for its third quarter, much of it due to growth in emerging markets like China, India and Brazil. Adding Bucyrus will allow Caterpillar to expand its footprint in countries that are “improving infrastructure, rapidly developing urban areas and industrializing their economies,” according to the Caterpillar press release.

Some of the smallcaps in the overall mining and mining equipment sector include:

Cleveland, OH-based Nacco Industries (NYSE: NC, engages in a variety of small appliances and specialized retail as well as mining businesses in the Americas, Europe and Asia-Pacific. It designs and sells a line of lift trucks and aftermarket parts under the Hyster, Yale, UNISOURCE, MULTIQUIP and PREMIER brand names. Additionally, it mines and markets lignite and sub-bituminous coal to electric utilities, independent power providers and a synfuels plant, as well as provides dragline mining services for limerock quarries in Florida. It has a market cap of $766 million and is trading for about $92, at the upper end of its 52 week range of $45-$114. However, it  trades very lightly, averaging about 13,000 shares a day with a three-month average of 25,000 shares.

Chattanooga, TN-based Astec Industries (Nasdaq: ASTE, designs and sells equipment and components used in road building, utility and related construction activities. Its Aggregate and Mining Group segment provides a host of mining-related equipment including jaw, cone and impact crushers, as well as vibrating feeders, inclined and horizontal screens; aggregate processing equipment, ore processing equipment and mobile screening plants, just to name a few products. The company’s market cap is $660 million and its stock is trading at about $30 with a 52-week range of $22-$37. It trades about 110,000 shares a day with a three-month average of about 153,000 shares daily.

From “down under,” with a market cap of $467 million (AUD), Queensland-based Industrea Limited (OTCQX: IULTY, is a strong play on the China coal mining sector, which represents 40 percent of the company’s revenue. Industrea comprises a group of companies involved in the global mining products and services business and their products and services are sold in the U.S., South Africa, Russia, Indonesia and Papua New Guinea. Customers include BHP Billiton, Rio Tinto Coal, Anglo American, BMA, Barrick Gold, Vale, Xstrata and several of China’s leading mining groups. To enlarge its global shareholder base, the company has established an ADR listing. In addition, the company recently announced a 3 for 1 reverse split in Australian shares. The 52-week range is $0.68-$1.47 and traes about 2.8 million shares a day.

Santa Fe Gold (OTCBB: SFEG, is an Albuquerque-based $87 million market cap mining and exploration company focused on acquiring and developing gold, silver, copper and industrial mineral properties. It currently has properties in New Mexico and Arizona. The company recently announced plans to acquire all the outstanding shares of common stock of Columbus Silver Corporation (TSXV: CSC) and estimates the combination will double its controlled gold and silver resources available for processing at its New Mexico facility. The combination will also allow them to be a player in the North American market. The stock trades at about $0.94, at the lower end of its 52-week range of $0.90-$1.74. Average daily volume is 19,000 shares.