One of the most telling indicators of market sentiment is how the number of shares shorted for a company changes over time. We used this to run a screen on stocks of the clean energy industry.
We began by compiling a list of stocks of clean energy companies (those that use or produce sources of clean energy) for those seeing significant decreases in shares shorted month over month, indicating short sellers believe these stocks will outperform.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you think these stocks are poised to outperform? Use this list as a starting point for your own analysis.
List sorted by decrease in shares shorted as a percent of share float.
1. Power-One Inc. (NASDAQ:PWER): Designs, manufactures, and markets power conversion and power management solutions for the renewable energy, communications infrastructure, and other technology markets. Shares shorted have decreased from 10.94M to 9.55M over the last month, a decrease which represents about 1.5% of the company's float of 92.73M shares.
2. Trina Solar Ltd. (NYSE:TSL): Designs, develops, manufactures, and sells photovoltaic (PV) modules worldwide. Shares shorted have decreased from 16.27M to 15.58M over the last month, a decrease which represents about 1.16% of the company's float of 59.34M shares.
3. First Solar, Inc. (NASDAQ:FSLR): Manufactures and sells solar modules using a thin-film semiconductor technology. Shares shorted have decreased from 18.70M to 18.04M over the last month, a decrease which represents about 1.11% of the company's float of 59.56M shares.
*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.