Shows you the power of herd mentality; massive move up on a downgrade. Right now solar is king. Every stock in the sector up from 4 to 14%, regardless of valuation or fundamentals - even the recent poor performer
LDK Solar (LDK) is ramping. Obviously selling that
Trina Solar (TSL) was not the right decision; once it broke $54 it had cleared its resistance that it had been fighting for a while; now with that cleared out there was no resistance until mid $60s. With that said, these stocks can continue to run as there are no earnings reports on the near term horizon, but perhaps some reality will set in once earnings reports start hitting. However, it does look like the polysilicon shortage should be fixing itself by back half of 2008 through 2009 which would be a large benefit to all these names, save for
First Solar (FSLR).
Suntech Power is now up 50% in the matter of a few weeks; amazing. The scary thing is it's actually one of the 'cheaper' stocks on valuation in the sector - some of the other stocks I can't make heads or tails of their valuation even based on 09 estimates. Oh well, PE ratios are for old fogeys I guess - this is a 'new paradigm' (I believe the 15th new paradigm in the past decade) ;)
Long Suntech Power, LDK Solar in fund; no personal positions
2 comments:
I find these things (solar stocks, here) difficult to monitor and predict as I sold too early too. I find Suntech odd because last I heard, they are not going to have a very good quarter--at least that's what they said in their Q2 conference call. So maybe analysts are looking ahead and telling fund managers that the story is soon to get better. As for today, not sure how many big buyersthere were, but there sure were lots of small ones. I'm pretty sure this will come down, but from where? 65 to 45 over the next 3 months...who knows?
yes my timing on this sector has been atrocious. I left a ton on the table all quarter from Yingli to Suntech and from never buying the US pair of high fliers. Sadly even at this stretched valuation STP is cheaper than SPWR... thats how overvalued SPWR is (to me)
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