Back in May, I wrote a report on the emergence of solar companies in the markets and how they've gained more and more attention over the last decade. This growth has been seen through overall production in addition to the creation of new jobs within the market. One small cap that I featured was a company, XSunX, Inc (OTC:XSNX), which has recently begun to release a string of corporate updates and has had its CEO, Mr. Tom Djockovich, featured multiple times on the nationally recognized MoneyTV show.
In the latest update, the company has expressed that it is expanding on its current business model. XsunX, Inc. is currently working to commercialize a new manufacturing process to produce low cost, high efficiency thin-film Copper Indium Gallium (di) Selenide (CIGS) thin film solar cells. Through its patent-pending processing technology called CIGSolar®, XSunX focuses on the mass production of thin-film CIGS solar cells.
Regarding its recent update, XSunX CEO expressed that it is expanding the marketing and sales efforts by adding solar business solutions to the service offerings. This may be perfect timing and make a lot of sense for XSunX as well as other solar companies to focus efforts on expanding business beyond simply producing solar cells. With the recent shake-up over earnings with companies like First Solar (NASDAQ:FSLR) seeing a decline in revenue of 52% since the end of 2012 and Real Goods Solar (RSOL) showing a decrease in gross revenues of 37% as of its last Q I think the market may start to reach out to other means of expansion beyond the manufacturing aspect.
The update went on to say that, "…our target audience understood the message and we have already received inquiries. We have begun discussions with customers responding to our expanded service offerings. Although this is just the beginning, we are off to a good start and we plan to keep the focus on these emerging opportunities. The goal is to increase the number of opportunities in our sales pipeline and to start closing deals as soon as possible."
As a micro-cap company that trades an average of 1.3 million shares a day (3mo avg), this may be the solar stock to watch as this story unfolds. As with any small cap stock, there are many risks involved including lack of liquidity and increased volatility. But I think if it can capitalize on the new direction while continuing to develop the CIGS technology, there may be opportunity down the road for a solid rebound to levels it saw back in May. My questions here are, "Would the solar market benefit from expanded efforts beyond the traditional "manufacturing" ?" and, "Could this move from a small cap be replicated with large caps especially in this time of decreased earnings from current operations?"
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.