Cooling Off: Solar Stocks Feeling the Cramer Effect

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Includes: CY, ESLRQ, FSLR, SPWR, STP, SUNEQ, TSL
by: Himanshu Pandya

Solar stocks felt the heat Friday as Jim Cramer went bearish on the industry.

Here’s what he had to say (via Seeking Alpha):

Moving on, Cramer would say goodbye to sun power stocks, because, like the dot.com craze in the 90s, “I think you are going to get a textbook case of oversupply.” Cramer would sell every solar stock including SPWR, ESLR, TSL and even his favorite FSLR. The only company with a solar connection Cramer likes is CY, a semiconductor company which is aggressively buying back shares and owns “the lion’s share” of Sunpower. He feels the company could be split in two and urges investors to “buy CY before it buys itself.”

Here’s the action in Solar stocks Friday:

Cramer_Solar

Chinese Solar stocks felt additional heat as China’s central bank said it’s widening the trading band of the yuan, hiking interest rates and increasing banks’ reserve requirements, in a move to cool its surging stock market.

I am not sure what Jim Cramer is basing his assessment on but it seems like Solar Stocks do need some time off to cool off. Of course, I do have a bias here as I am short First Solar (NASDAQ:FSLR) and sold Suntech Power (NYSE:STP) a few weeks ago. I am also short MEMC Electronics (WFR).

It would be interesting to see how Solar stocks react this week because long term downtrend might provide a buying opportunity.

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