Solar Stocks Go Nuts On Supply Agreements

by: Eric Savitz

Something truly odd is happening with the solar stocks. The sector went slightly nuts Monday, as one company after another announced new supply agreements or other related announcements. Here are the basics of the announcements, with links to the full texts, followed by the stock activity.

  • First Solar (NASDAQ:FSLR): Announced five deals to make solar modules totaling 685 megawatts by the end of 2012; the company says the deals can bring in as much as $1.28 billion over the length of the contracts. The contracts are with a bunch of companies that you likely haven’t heard much about.
  • JA Solar (NASDAQ:JASO): Announced that it has commenced production on four additional solar cell production lines. The company said it's ahead of schedule. The four new lines increase its manufacturing capacity to 175 MW a year from 75 MW.
  • Trina Solar (NYSE:TSL): Said it signed four contracts to supply 99 MW of worth of photovoltaic modules to customers in Italy and Germany.
  • Yingli Green Energy (NYSE:YGE): A week ago, the company announced a deal to supply 9.55 MW of PC modules to a Spanish customer.
  • Hoku Scientific (HOKU): On June 20, the little Hawaiian company’s shares went skyward after it announced a polysilicon supply deal valued at $185 million over seven years.
  • OK, so check out Monday’s solar stock madness:

  • First Solar rose $23.05, or 24%, to $119.34.
  • JA Solar gained $5.51, or 15%, to $42.76.
  • Trina Solar rose $9.29, or 16%, to $67.37.
  • Yngli Green Energy advanced $2.46, or 16%, to $17.96.
  • Hoku jumped $1.52, or 14%, to $12.65.
  • Solarfun (SOLF) improved $1.28, or 11%, to $12.53.
  • Suntech (NYSE:STP) gained $1.57, or 4%, to $39.56.
  • LDK Solar (NYSE:LDK) gained $2.84, or 8%, to $36.37.
  • To be clear: those are the gains Monday alone, not this month or this year.

    Are those gains justified? I have no idea. But if ever a sector looked frothy, this is it.