Best of the Week
Most Popular
1.BrExit House Prices Crash, Flat or Rally? UK Housing Market Affordability Crisis - Nadeem_Walayat
2.Stocks Bull Market Climbs Wall of Worry, Bubble? When Will it End? - Nadeem_Walayat
3.Gold Price Is Now On Its Way To All-Time Highs - Hubert_Moolman
4.Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - Harry_Dent
5.UK interest Rate PANIC CUT! As Banks Prepare to Steal Customer Deposits - Nadeem_Walayat
6.Gold and Silver Bull Phase 1 : Final Impulse Dead Ahead - Plunger
7.Central Bankers Fighting An Unprecedented Global Economic Slowdown - Gordon_T_Long
8.Putin Hacking Hillary for Trump, Russia's Manchurian Candidate? - Nadeem_Walayat
9.Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - Chris_Vermeulen
10.Gold Sector - Is it time to Back up the Truck? – Mortgage the Farm? - Peter_Degraaf
Free Silver
Last 7 days
A Zombie Financial System, Black Swans and a Gold Share Correction - 25th Aug 16
OPEC’s Output Freeze: What Has Changed Since Doha? - 25th Aug 16
Merkel Prepares For a Deliberate Crisis While White House Plans For a Disastrous Succession - 24th Aug 16
Suspicious Reversal in Gold Price - 23rd Aug 16
If Trump Can’t Pull Off a Victory, Expect a Civil War - 23rd Aug 16
Ceding ICANN and Internet Control to Globalists - 23rd Aug 16
How to Spot an Oversold Stock Market - 23rd Aug 16
Gerald Celente Sees Worst Market Crash, New Military Conflict, Gold Spike to $2,000/oz - 23rd Aug 16
EU Olympics Medals Table Propaganda Includes BrExit Britain - 22nd Aug 16
BrExit Win's Britain Olympics Success Freedom Dividend, Economy Next - 22nd Aug 16
Stock Market Top Forming, but Slowly - 22nd Aug 16
(Really) Alternative Banking Systems - 22nd Aug 16
Vauxhall Zafira Fires - Second Recall Issued - Inspection Before Bursting into Flames? - 21st Aug 16
Will the Stock Market Bubble Pop Regardless if the FED Never Raises Rates? - 21st Aug 16
US Government Spending - 3 Big Stories Not Being Covered – Part III - 21st Aug 16
Silver Analysis - 20th Aug 16
SPX New Highs, Correction Next? - 20th Aug 16
Housing Bubble - The Marginal Buyer Holds The Pin That Pops Every Asset Bubble - 20th Aug 16
Gold Miners Q2 2016 Fundamentals - 19th Aug 16
Which Price Ratio Matters Most in a Fiat Ponzi? - 19th Aug 16
Big Policies, Bigger Failures - 19th Aug 16
Higher Crude Oil’s Prices and USD/CAD - 19th Aug 16
Here’s Why You Should Look for Dividend Stocks and How - 19th Aug 16
Deglobalization Already Underway — 4 Technologies That Will Speed It Up - 19th Aug 16
These 6 Charts Show Why the Average American Is Fed Up - 18th Aug 16
SPX Easing Lower - 18th Aug 16
Low / Negative Interst Rate’s Legacy - 18th Aug 16
The 45th Anniversary of The Most Destructive Event In Modern Monetary History - 18th Aug 16
USDU - An Important Perspective on the US Dollar - 17th Aug 16
SPX Completes Wave 1 Decline - 17th Aug 16
How to Quickly Spot Common Fibonacci Ratios on a Chart - 17th Aug 16
When Does a Forecast Become a Trade? - 17th Aug 16
Kondratiev Wave - The Financial Winter Is Nearing! - 17th Aug 16
Learn "The 4 Best Elliott Waves to Trade -- and How to Trade Them" - 16th Aug 16
Stock Market Bears Turning Bullish At New All Time Highs - Time to Get Worried? - 15th Aug 16
Job Seekers Sacrificed to the Inflation Gods - 15th Aug 16
A Look At Commodities and Financial Markets Trading Week Ahead - 15th Aug 16
Stock Market New Top Forming? - 15th Aug 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

How to Trade Elliott Waves

The Five Best Solar Power Stocks

Companies / Renewable Energy May 18, 2012 - 04:13 PM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleSolyndra famously imploded, the price of polysilicon dropped 60%, and a glut of natural gas has made it the "new" alternative energy source.

But make no mistake about it: alternative energy stocks are going to be long-term winners-especially for solar power investors.


For instance did you know that Germans are initiating a campaign valued at more than $260 billion to harness wind and solar power. It is already being called the biggest restructuring of the national energy landscape since the end of World War II.

Or that China plans to double its solar power capacity by installing three GW this year, according to China Daily.

And despite the recent declines, analysts expect European demand to rise again in 2012. UBS forecasts that solar power generation will rise from 21 GW in 2011 to 25 GW in 2012.

What's more, solar panel prices are expected to stabilize as a result of tighter inventories and improving demand.

That's increasing talk within the industry that pure-play alternative energy stocks could be gobbled up by oil companies or large-scale manufacturers.

With that in mind here are five solar power possibilities, including innovative companies, takeover targets, and companies that can compete on cost.

Five Solar Stocks to Power Your Portfolio
First Solar Inc. (Nasdaq: FSLR): Perhaps no single solar power company is as beaten down as First Solar.

Just four short years ago, FSLR peaked at a high of $311.14. Since those halcyon days, FSLR has shed nearly 95% of its value. It's currently trading below $18.

However, even after a surprise $400 million loss in Q1/2012, there are a few reasons to like First Solar.

New CEO James Hughes, an internal hire, has sufficient industry experience to guide the company toward the goals of its new five-year strategy. First Solar's existing 2.7GW project pipeline should provide sufficient earnings to survive while the company shifts to non-subsidized utility projects, which offer cost, scale, and efficiency advantages.

In fact, FSLR recently raised 2012 EPS due to cost savings from recent restructuring, which should help the stock in the short term.

Long term, First Solar is shifting its focus from government-subsidized Western markets to places like India, where solar electricity is competitively priced with more traditional sources. What's more, First Solar's thin-film panels have a technological advantage where heat and humidity tend to limit the effectiveness of Chinese-manufactured silicon panels.

First Solar's current valuation makes it an attractive takeover target for a larger company, and General Electric Co. (NYSE: GE) has been mentioned as a possible suitor.

SunPower Corp. (Nasdaq: SPWR): SunPower saw its 1Q/2012 revenues jump 9% over the same period in 2011, to $494 million, which exceeded analyst expectations. Net income clocked in at ($74 million), or a loss of $0.67 per share. Cash and cash equivalents dropped 54% to $302 million as the company reduced its debt by 34% from $978 million to $639 million.

SunPower's cost per watt is high at $1.08, but management aims to bring it down to $0.86 by the end of 2012. On April 16, the company announced plans to shutter its oldest factory and shift production to facilities with more efficient equipment.

French oil company Total SA (NYSE: TOT) owns 60% of SPWR; if the industry begins to consolidate, don't be surprised if TOT splurges for the other 40%.

GT Advanced Technologies (Nasdaq: GTAT): GT provides polysilicon production technology and multicrystalline ingot growth systems, and related photovoltaic manufacturing services for the solar industry worldwide.

It also offers sapphire growth systems and material for the LED and other specialty markets. Between backlighting for small/medium LCDs and applications for large-screen televisions, demand for LED-related lighting is exploding. In fact, researchers expect demand for LED lighting applications to increase more than 25% to 227 billion units.

GTAT is currently trading 65% off its 52-week high of $17.50. The Street's marked it with one-year target price of $12.27, which represents an increase of 100.49% from its current price of $6.12.

GTAT should see success moving forward, thanks in part to the growing LED business. But GT's reputation as a leader in production technology should make it a major part of the solar industry's reinvention.

While the industry is mired in a race to the bottom, with manufacturers trying to improve efficiency and cut costs, GTAT's manufacturing services will be more important than ever.

Trina Solar Ltd. (NYSE: TSL): China's Trina Solar has the cost advantage over most of the industry (possibly excluding First Solar's thin-film panels).

TSL has a projected three-to-five year EPS growth rate of 40%, a five-year sales average growth of 76%, and a long-term debt to equity ratio of only 0.57.

TSL is up over 15% since April 23. Its 52-week high was all the way up to $26.83, but that was a full 12 months ago. Since the beginning of the year, it's peaked at nearly $11, but has mostly traded between $7 and $9. It's one-year target is $8.91.

What's intriguing about TSL is the Chinese government's commitment to ramping up solar installations, and the company's ability to undercut almost all other panel manufacturers on price.

Even in the U.S., where Trina was singled out by the Commerce Department for the highest anti-subsidy punitive tariffs (4.73%), Trina expects good growth. Chairman and CEO Gao Jifan said he expects sales of solar equipment to the Americas this year to reach 20% of Trina's sales.

Yingli Green Energy Holding Co. Ltd. (NYSE: YGE): Yingli is another Chinese solar company eyeing growth outside China's borders.

Earlier this month, Japan shut down its last active nuclear reactor in the wake of the March 2011 earthquake, tsunami, and nuclear disasters. This year, YGE set up offices in Japan to take advantage of the gaping hole in Japan's energy infrastructure.

Additionally, YGE has had some success selling wholesale to companies like SolarCity.

And like TSL, it's targeting growth in South America; YGE just signed an agreement to install 1500 of its 245 series modules on Brazil's highest-profile football stadium, Estadio do Maracana, the site of the 2014 World Cup.

So don't expect solar power stock to be on the mat forever.

New technology and improved efficiency will soon allow solar panel manufacturers to produce essential components at a price that the market will pay.

And as oil and natural gas prices head higher over time, solar will once again be framed as the affordable alternative energy source.

When that happens the outlook for solar power stocks will be considerably brighter.

Source :http://moneymorning.com/2012/05/18/investing-in-alternative-energy-stocks-five-solar-power-winners/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife