Almost all U.S.-listed solar stocks posted massive gains in April, with some up over 40% in the course of the month. Also, a flurry of IPOs may be pressuring existing issues as the number of publicly traded PV pure-plays on U.S. exchanges has tripled in the past 6 months - from only three as recently as November to nine as of last week (not including several micro-caps).
Much of last Friday's sell-off in the solar space can be attributed to the Chinese central bank's decision to raise interest rates and reserve requirements, in yet another attempt by Beijing to cool down China's surging economy and lofty stock market valuations.
RayJay continues to be very bullish on PV. These short-term stock gyrations aside, they believe that the global PV market is fundamentally in excellent shape and see this pullback as an opportunity to buy on the dip.
Firm believes PV manufacturers naturally stand to benefit, including Outperform-rated
JA Solar Holdings (NASDAQ:JASO); currently at only 16.1x their 2008 EPS estimate
SunPower Corp. (NASDAQ:SPWR); at 27.8x 2008E EPS
Suntech Power Holdings (NYSE:STP); at 21.4x 2008E EPS
RayJay views the current valuations as highly attractive within the context of a market growing at 20%+ per year.
Notablecalls: I'm no expert on the PV space but I do consider Raymond James one of the best firms out there. I suspect these comments will create some real buy interest in the mentioned stocks today. My favourite of the three is JASO. Going to call this one actionable.