Bevy of Solar Companies Reporting Soon

The only major solar name to report thus far is Sunpower (SPWR), and in the coming week we have a lot of the major tier 1 and tier 2 type of names coming down the pike. It should be very interesting. As I written in the past, these stocks can move 30-60% in just a few days up, or 30% down. Not my type of thing but for those who love the high of getting a big score (Las Vegas style investing), I am sure a lot will be placing "bets" (ahem, investing) ahead of earnings. I've cut back my solar exposure knowing full well I could leave a ton on the table if some of these move but its a risk/reward type of movement. I have been beating the market handily and I don't want to stupidly give away 30% overnight in a 3% type of position. Again, 10 years ago I'd be in there with the loonies making these pre-market "bets", but I now have graduated to trying to hit a lot of doubles, and singles, with a few triples and home runs and keep my strikeout ratio low (.300 hitter), as opposed to a .230 hitter who hits 40 home runs but strikeouts every 3rd at bat. Maybe it's my old age showing...

With that said, many of these stocks have been demolished in the January sell off so we might have more upside moves than down. But of 10 stocks in this space, 5 can gain 50% and 5 can lose 50% :) Just not my odds. Further, with this Chinese storm we might have some issues on Quarter 1 guidance which might spook the investor bases. Again, solar to me was a much easier space to invest in about a year ago when I was getting involved in the space - far fewer people were in it, the stocks acted relatively rationaly, there were far fewer public companies, and far fewer speculator and momentum traders. Now, it's a circus.

Let's see who is coming down the pike

Wednesday
First Solar (FSLR) - the non polysilicon player, and most highly valued name. They absolutely demolished earnings estimates last quarter - I do expect them to beat yet again but by how much is an open question and how will guidance look? The beat last quarter was so tremendous I am not sure such a feat could be repeated and as always it's not about what they report but what they report versus expectations. But this is a quality company; it simply trades at such a premium it is hard to really build a huge position in it. I am currently out of this name as I noted late last week; potentially giving up a large gain off of an earnings beat but content to not risk precious capital. From a peak of $280 its back down to the $190s.

Friday
Yingli Green Energy (YGE) - This is one of those companies whose size puts it right behind the major tier 1 names, but larger than most of the tier 2 names. I've had some issues with name simply on ownership structure, share counts not be fully disclosed etc, but small details like that has never stopped speculators from running this stock up. This has been a case of me being correct on the name, but my timing was off. In quarter 1 of my fund/blog, I infamously sold my large position in YGE in the teens - fully outlining my worries about the mgmt stucture/share count issues coming down the pike [August 10 - Closing Yingli Green Energy (YGE)], only to watch to skyrocket to near $40 within 2 months. So if I remained oblivious to the issues I would of had a huge gain. And now 5 months later?... well it was back to $18 last week. Just another example of how you can be correct conceptually but never (ever) underestimate the power of the herd (who never let facts get in the way of a good hype). YGE actually operationally reports some great numbers (solid gross margins especially) but due to the large share count (which last I looked I still could not fully quantify due to ownership structure) I thought their EPS growth would struggle to some degree in 2007.

Next Wednesday
Suntech Power (STP) - I consider this to be the highest quality Chinese PV maker - largest, deepest, strongest, scale, scale scale. It has been thrown in with the rest of the lower tier junk in this sell off, and even broke down below the 200 day moving average (which it has since recovered). I still hold this name and plan to hold it for the long run since it's the "safest" even if it does not promise the greatest long term return. From a peak of $90 we are now down to $50. Even with my sales along the way in this name, I'm flat on the position and have given back a very large gain in this stock.

Monday, the 25th
LDK Solar (LDK) - quite possibly one of the most controversial stocks (right up there with the Nutrisystems and Overstocks of the world) I've seen in a long while. I've kept buying this name on valuation but it's kept failing me. I still like it's spot as an arms merchant to the industry (wafers) and hope one day things settle down and a decent valuation is given to this name. From a high of $75 the stock is now $35.

Trina Solar, JA Solar also should be reporting in the next few weeks and Canadian Solar is in early March. Of all these names, Canadian Solar - a long time laggard - actually looks the most promising on a technical basis.

Long Suntech Power, Trina Solar, LDK Solar in fund; long Trina Solar in personal account