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JA Solar: Heating Up

|Includes: HQCL, JA Solar Holdings, Co., Ltd. (JASO), SOL

 The solar sector is starting to heat up and I am bullish on the group long term. Some of the smaller cap names such as Renesola (SOL) and SolarFun (SOLF) have been running up of late as some of the momentum players have been jumping on the bandwagon. While some of this may be frothy action, I think the future is bright. The World Bank recently announced a plan to fund five African countries with $5.5 billion for solar projects to be finished by 2015. However, there is one stock I like in particular: Chinese stock JA Solar (JASO).

JA Solar is a small cap, but not a micro cap at about $1 billion in market capitalization. It trades over six million shares a day, so the liquidity is quite good. Additionally, it has broad analyst coverage, with 18 analysts covering the stock. In terms of the fundamentals, the company just announced it signed multiple supply agreements with customers to provide more than 500MW of solar cells for delivery next year. The CEO has stated that he is seeing strong demand across the board for their products from customers. The stock got nice pop on the news of this solar cell supply agreement.

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