Solar stocks, for reasons such as global warming, increasing energy constraints, and a plethora of other factors, have the potential to offer tremendous opportunities. Their volatility can offer further opportunity, as well as significant frustration. A solid understanding of the factors that influence stock price is usually a key to success in trading and investing. This can be particularly true in the solars. This post therefore attempts to shine light into some key issues so that a better understanding may be achieved. On here I want to add some important points my original post "LT Bull Market Solar." I hope this is informative.

Many solar stocks are now cheap based on FY and FWD P/E ratios and PEG ratios. Yet that is not the whole story. Goldman pointed out on the last Trina Solar (TSL) conference call that cash is important. They downgraded TSL largely because they are concerned as to how a rapidly growing business can fulfill its goals without substantial cash and cash flow. Here is an article written about this topic. Here is another take. And to be complete, here is a type of response on the issue.

Originally written on June 26, 2008.

This post is organized in the following way:

I. Peering into the Solar Industry