Zacks Investment Research has JA Solar (JASO) rated as a Strong Buy based on growth and valuation. Combine that with the fact that it has pulled all the way back to its 200 day moving average and it adds up to a very compelling solar play at current levels.
Zacks points out that JASO is now trading with a PEG ratio of just .4 (any number below 1 is very good), a forward PE of 5.2 (S&P average is 15.2), a price to book of 1.3 (in the range of a value stock) and an industry leading 22% ROE.
Shares of JASO are currently trading slightly higher, and as I mentioned above, I agree that based on valuation shares are compelling, but also based on technicals. JASO is now very oversold on both the weekly and daily charts as sell volume continues to diminish. I believe this is an indication that buyers will soon regain control of this stock and begin pushing it higher. The only risk I see to JASO is a collapse of the overall stock market which is way overbought. I’m personally close to adding a longer term position in JASO.
Disclosure: Long JASO.