Shares of Ascent Solar Technologies Inc (ASTI) closed Monday's trading session higher by more than 21% and are now up by more than 183% over the past three months. There are three reasons why ASTI is my favorite solar speculation.
Consumer Electronics/ iPhone
In recent comments, ASTI CEO Victor Lee said that the company plans to change its business model to focus on consumer electronics instead of rooftop solar panels. ASTI is moving away from the rooftop solar market because of low prices and an ultra competitive environment. The weak solar market has led to major loses for shareholders of popular solar stocks such as LDK Solar (LDK), JA Solar (JASO), Trina Solar (TSL), First Solar (FSLR), and many others. Instead, ASTI will go into the specialty solar space. One notable new customer for ASTI is Apple (AAPL), ASTI will supply the new solar-power charging case for the iPhone. This news is very bullish for ASTI and, I believe, one of the reasons the stock has been so strong of late. However, the solar-powered iPhone case could just be the tip of the iceberg for ASTI.
ASTI has more cash than debt. The company has 13.4 million in cash and just 6.74 million in debt. Comparably, other major solar stocks have massive net debt loads. JASO has more than $300 million in net debt, LDK has more than $3 billion in net debt, TSL has more than $500 million in net debt, and best of bread FSLR has just over $200 million in net debt. Simply put, ASTI is in significantly better financial shape than its peers.
As shown by the chart below, ASTI is trading at a 52-week high will almost all other solar companies are near a 52-week low.
ASTI will likely draw a group of buyers that will not consider other solar stocks: momentum traders. This phenomenon should drive shares of ASTI higher as hype builds over the company's improving fundamentals.
Despite the more than 183% move over the past three months, I believe ASTI is the best solar speculation. ASTI's decision to move from the commodity driven solar rooftop business to the specialty solar consumer electronics business, strong balance sheet, and momentum are all reasons to consider speculating with ASTI.