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The Time Is Right For Solar Stocks

|Includes:First Solar, Inc. (FSLR), GS, SPWR, TSL

The solar industry may be near a major pivot low and nearing a turnaround. After months of sharp downward pressure on stock prices, solar players like First Solar, Inc. (NASDAQ:FSLR), SunPower Corporation (NASDAQ:SPWRA) and Trina Solar Limited (ADR) (NYSE:TSL)  are seeing buyers return. This reversal is being linked to positive comments from a Goldman Sachs Group, Inc. (NYSE:GS)  analysts. While the price target was cut from $150 per share, a six month price target was given at $90. The comments from this analyst go to the ideal that the strongest solar players will survive. First Solar is one of them.

The idea of solar stocks being a good long term buy is not surprising. While margins have collapsed dramatically over the last year, stock prices have fallen faster. First Solar dropped from a high of $175.45 in 2011 to a recent low of $52.32. This is a decline of 70%. For those with a longer term outlook, for those that believe the strong will survive the flush out and margins will resume, the best of breed solar stocks are a obvious choice at current valuations. If the Goldman Sachs analysts is anywhere close, this could be the swing trade of the year. This Chief Market Strategist agrees.

Gareth Soloway