Key highlights from the week in solar energy stocks:
• Crude Oil ended the week up 6.50% after similar gains last week.
• First Solar Inc. (Nasdaq: FSLR) ended the week up 7% despite declining by 4.5% on Friday. I shorted First Solar in the low 30’s and think the stock is overprices. However, I am very nervous about First Solar. Estate of John T. Walton owns about 82% of the company and with Walmart’s ambitious plan to go Solar, I think it’s very likely that First Solar will be involved in some way. Unless a Walmart (NYSE: WMT) contract is announced I don’t see why First Solar wouldn’t go lower from here.
• MEMC Electronics (NYSE: WFR) is the another stock I am currently shorting. After a huge post earnings run-up last week of 15.18% the stock didn’t go anywhere this week. The stock ended the week up only 0.82% so this week will be the one to look for major movement either way.
• Suntech Power (NYSE: STP) had a poor week after a great start. Suntech Power gave a mid quarter update to shareholders and it didn’t seem like the company did their homework with the MSK acquisition. Suntech cut the production output and revenue for MSK by half for 4Q 2006. MSK’s production will be moved from Japan to China for obvious cost savings. I only see this as a short term issue until MSK is fully integrated with Suntech Power.
• Sunpower Corp. (Nasdaq: SPWR) announced the pricing of its public offering of $175 million aggregate principal amount of 1.25% senior convertible debentures due 2027. SunPower also granted the underwriters of such offering an option to purchase up to an additional $25 million aggregate principal amount of the debentures.
• Canadian Solar (Nasdaq: CSIQ) finally showed some signs of life as the stock ended the week up about 18%.
• Trina Solar (NYSE: TSL) got upgraded to ‘Outperform’ by Cowen & Co as the stock moved another up 5% after gaining 31% last week. Trina Solar also signed a 6 year Polysilicon supply contract with Wacker Polysilicon, division of Wacker Chemie AG.
• Solarfun Power Holdings (Nasdaq: SOLF) got upgraded to ‘Sector Outperform‘ by CIBC World Mkts.
• I sold my Evergreen Solar (Nasdaq: ESLR) stake last week for a quick gain. I don’t consider Evergreen Solar as a core Solar holding such as Suntech Power so I don’t mind trading this stock.
Disclosure: I am long STP and short FSLR and WFR. I may buy stocks listed in this article in the next three days.