3 Solar Power Picks for this Month

3 Solar Power Picks for this Month

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The downside in solar power appears to finally be over.

Despite dipping at the beginning of May to $24, SolarCity (SCTY) shares rebounded and are trading near an all-time high. Investors are unfazed by its most recent quarter when the company reported in March, 2013 that missed consensus estimates. The company deployed 48 megawatts, a 129% increase over the previous year. As of February 28, the company said it still has 115 megawatts of financing available, giving nearly six months of target deployment. Solarcity has 194 megawatts of backlog.

Short-term Catalysts

Company-specific developments are giving the solar energy sector as a whole hope, thereby acting as a positive catalyst for the players.

SolarCity filed a suit against the Treasury department alleging that some of the grants SolarCity received, which were taxpayer-funded, were not as large as initially promised. This news helped push shares up by 7% on the week of May 6.

Earlier this month, SunPower (SPWR) reported quarterly revenue of $574.6 million ($635 million GAAP), or $0.22 per share (GAAP loss of $0.46 per share). The company said that initial construction of the Antelope Valley Solar Projects for MidAmerican Solar began. The project is 579 megawatts.

SunPower said that geographically, business in Japan and Europe was healthy. In Japan, 25% of total shipments were from Toshiba and Sharp. In Europe, the company said that it expects to be profitable by the end of the year.

A rally in First Solar (FSLR) shares began in April after the company guided higher. First Solar reported sales that beat estimates by $27.9 million. The company generated revenue of $755.2 million, or earnings of $0.69 per share. Gross margins improved by 7% to 22.4%.

Risk: Upside Priced in Solar Stocks

Analysts are cautious on First Solar, and the bullish forecast given by the company may already be priced in its shares. SunPower, SolarCity, and First Solar are all at or near a yearly high. A reversal in sentiment for the market could spark profit-taking for solar energy companies. Investors should be cautious on the weaker players. The monthly return range between 17.8% and 77%:

Final Thoughts

The bankruptcy of SunTech and the minimal competition from smaller players like LDK Solar (LDK) are having a positive impact on the existing players. Investors should continue to expect additional upside in solar energy plays in the long-term.

Written by Chris Lau


5 responses to “3 Solar Power Picks for this Month”

  1. Kevin says:

    Under you final thoughts, the bankruptcy was Suntech, not SunPower.

  2. Beautifoul article and good ideas.

  3. Sheryl says:

    In the long run, solar systems will be an extreme benefit, and this is not only from the environmental perspective, but from the financial one as well. The whole world is considering ways to save the planet from devastation, which was actively taking place all the previous decades. Solar energy is an effective solution, as well as other alternative energy sources. On the first stages the transmission to new technologies might be difficult and quite consuming in terms of funds, but in the end it will cover all the expenses and bring immense revenue. If interested, you can find more information on the topic at http://topessaywriter.org/write-my-paper-for-me.h

  4. quand bien même nous avons à présent ennuyé avec sa lecture d'une variété de matériaux laquelle parlent de crise financière et un capital, cependant je suis très heureux de consulter les commentaires dans ce blog. Je voudrais dire le grand grâce pour l'auteur du blog qui partagent déjà un ensemble de informations.

  5. David says:

    No doubt, this is a good idea. In near future, solar system will be a great benefit. It will benefit us in both economic and environmental perspective as well. When the whole world is searching for an alternative solution for energy emergence, solar system will result the fulfilling the demand.

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