Seeking Alpha

Solar stocks continue rallying, with help from Trina

  • Solar stocks, among the biggest standouts in a year that has been very good to many high-beta tech names, have staged a strong two-day rally in the wake of Trina's (TSL +13.2%) Q2 beat and guidance hike.
  • Trina's numbers have sparked three upgrades, the most recent of which came today, courtesy of Cowen.
  • Bloomberg notes Trina, SunPower (SPWR +4.3%), and JinkoSolar (JKS +5.6% - just announced a new 23MW supply deal) are all operating at full capacity, and thinking of expanding.
  • S&P's Angelo Zino: "I think it’s safe to say that we’ll see a number of tier-one manufacturers add capacity, probably in 2014."
  • That would be a positive for equipment suppliers such as AMAT, GTAT, and VECO, who have seen their solar orders plummet as module makers scramble to stabilize crashing prices and margins.
  • Other names rising today: CSIQ +9.7%. SOL +6.7%. YGE +6.2%. JASO +4.2%. CSUN +5.4%. ASTI +5.1%. STP +3.8%. LDK +4.1%.
Comments (3)
  • I wouldn't be high on equipment suppliers. I guarantee you that all the solar companies have very fresh memories of all the pain they suffered the past couple of years, and they won't be too eager to dive into more capital spending. On top of everything else, most of them are neck deep in debt by now.

     

    By the way AMAT and VECO have very limited exposure to the solar industry. I do not know much about GTAT.
    21 Aug 2013, 04:44 PM Reply Like
  • AMAT and VECO had a lot more exposure before orders crashed.

     

    Agree manufacturers will be more cautious this time around, but expectations for equipment orders have fallen so much that even a moderate pickup (made necessary by sales growth) could be well-received.
    21 Aug 2013, 06:25 PM Reply Like
  • GTAT is a good proxy for the equipment business uptake in solar. Poly Silicon industry most likely would be the one which would need to reconfigure and expand in near future and considering the lead time for expansion at around 18 months some placement of orders on GT seimens reactors and TCS process equpts is likely soon in my opinion. Their primary customer for reactors is in a good position to supply poly to China and hence most likely would go ahead with stalled capacity expansion .
    21 Aug 2013, 06:18 PM Reply Like
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