Akeena Solar's Big Break

Includes: LOW, WEST
by: Ockham Research

A relatively little known manufacturer of solar energy products has scored a big win today, as Akeena Solar (AKNS) announced its panels will be made available at Lowe’s (NYSE:LOW). Akeena makes the Andalay AC panels which are the first solar panels aimed at allowing the do-it-yourself crowd to install on their homes. The panels can be installed on homes with relative ease and are equipped to produce household AC power without the hassle and potential danger of converting higher voltage of DC power to AC. In October, the design of these panels was awarded as a 2009 Popular Mechanics Breakthrough Product because it represents a potentially major shift in the solar industry towards “plug-and-play” solar power.

Thus far, the distribution at Lowe’s is still confined to only 21 stores in California, but it is a foothold to one of the largest home improvement retailers. Surely, if Akeena can show strong sales in its initial roll out it would mean wider distribution. At this point, pricing remains difficult to find on the Andalay panels, and undoubtedly that will be a major determining factor in success of the product’s sales. That being said, the ease of installation should enable greater adoption of their products and may be a major breakthrough.

Akeena Solar stock has been beaten down tremendously over the past two years falling to below $1 from its lofty price of nearly $16 in January of 2008 (click chart to enlarge). The distribution deal with Lowe’s has traders and solar enthusiasts excited for the potential, and the stock is trading 54% higher in morning trading. We have only recently initiated coverage on AKNS as Fairly Valued, and although we think there is great potential in these products, we would not upgrade the stock until the fundamentals actually begin to show improvement.

At this point, the company is still highly speculative, and investors who missed the more than 50% rise in the stock may want to wait for a dip. The company is still young with only $41 million in revenue last year and has yet to turn a profit. This trade would be speculative for sure, but Akeena’s announcement today is providing a lot of excitement.

Disclosure: None

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