Definitely seeing more reasonable PEs
HEADLINES Change Display [ hide $$ edit ]
• Sector Snap: Solar Stocks Regain Losses
AP (Thu 2:01pm)
• Sector Snap: Solar-Power Stocks Fall
AP (Wed 12:28pm)
Sector Snap: Solar Stocks Regain Losses
Thursday January 17, 2:01 pm ET
Investors See Recent Solar Sell-Off As Chance to Buy; Analysts Say Long-Term Outlook Is Strong
NEW YORK (AP) -- Investors sent solar-power stocks higher on Thursday, seeing the recent sell-off as a buying opportunity for major players.
Many solar shares have suffered because of economic concerns affecting the overall market, the recent energy bill passage without added solar incentives, and lower oil prices. In theory, higher costs for fossil fuels make alternative energy a more viable option.
Despite the recent decline, several analysts have reiterated a view that sector dips are not an indication of long-term weakness for the solar-power market.
"While we see demand hiccups ahead for the solar industry, we expect them to be short lived as the industry will stimulate elastic demand through lower prices," Thomas Weisel Partners analyst Jeff Osborne wrote in a note Thursday.
He named MEMC Electronic Materials Inc. and Suntech Power Holdings Co. as favorites. Osborne said MEMC offers an attractive share price and solid cash flow, while Suntech is an "industry heavyweight" that is set to post better gross margins.
MEMC shares rose 84 cents to $65.50 as Suntech shares gained $1.65, or 2.9 percent, to $58.10.
Cowen and Co. analyst Rob Stone said the recent sell-off was spurred by overall economic concerns and fears of solar-panel oversupply. He expects supply to "remain tight" at least into 2009, with improved costs leading to equality with traditional energy sources such as electricity.
"Some challenging transitional quarters along the way are inevitable, which the top tier players, and those with vertical or virtual integration should be best prepared to handle," Stone said in a note Thursday.
Banc of America Securities analyst Eric Brown, who is generally cautious on renewable-energy stocks, reiterated a "Buy" rating on JA Solar Holdings Co. shares Thursday following the company's report of a polysilicon supply deal. JA Solar said M.Setek Co. has agreed to provide it with an additional 458 metric tons (505 tons) of polysilicon this year.
The agreement will "provide a cushion" to its 2008 supplies in case another provider falls through, or enable it to raise production targets, Brown said.
JA Solar shares rose $2.53, or 4.2 percent, to $63.35. Other gains were posted by LDK Solar Co., which rose $2.64, or 7.7 percent, to $37.09; Canadian Solar Inc., which rose 86 cents, or 4.8 percent, to $18.76; and Trina Solar Ltd., which rose 90 cents, or 2.4 percent, to $38.19. |
