Going With Solar
February 12, 2008
By Greg Sushinsky
With so much green talk in the air, if you’re an investor interested
in getting into alternative energy, you can take your pick buying
anything from ethanol to wind to solar, or you can focus on less than
pure plays such as the waste industry, or you can come up with your
own combinations of such investments. Whether you choose to go
with large caps, mid-size, small or micro-caps--often those newest
and most innovative of companies and stocks, you need to know the
lay of the land a bit.
Most of the payoff in terms of actual profits, industry observers
feel, will be down the road for these companies. Re-cycling waste,
hybrid cars, and so on, are technologies that while available, are not
yet fully locked into the mainstream or economic pipeline in the
same way as, say, electric utilities. This is why many investors trade
the micro-caps in this sector, as technological advancements with
future earnings implications—sometimes far in the future—are more
the norm than the exception. But with growth rates, despite some
bumpy travel, predicted at up to 40% in the next few years, you can
see the appeal of these stocks. For the more long-term or value
investor or someone who wants some tangible earnings to look at
now, there are growing companies involved in the alternative energy
industry producing that right now: solar power stocks.
The solar stocks, which due to their technology are often classified
along with semi-conductor stocks, but which more properly belong to
the energy sector, are a group which is both producing energy and
revenues right now. Two such stocks, First Solar, Inc. (NASDAQ:
FSLR) and Canadian Solar (NASDAQ: CSIQ), are good examples.
This year, despite some downturn in the commitment to increase
government incentives for adding solar (mainly in Canada), these
stocks continued to make some headway. As in mainstream energy,
other factors play into the rise and fall of the immediate business
fortunes of these companies. This year, there was an increase in
demand for ethanol, while solar was down. The alternative energy
sector is still small enough so that increases in business in one
segment sometimes show a related reduced spending on another
alternative segment.
First Solar, a Phoenix, Arizona company which both designs and
manufactures proprietary solar modules, has a market cap of $13.5
B, and which is due to report earnings report earnings on
Wednesday, February 13 (tomorrow) before the bell, is expected to
announce 53 cents a share earnings for the fourth quarter and
$1.16 for the full year 2007. Analysts’ projections have earnings for
2008 slated at $1.98 per share. The stock was recently at 189, and
has traded from 32.60-283.00 in the last year.
Canadian Solar, by contrast, has a market cap of $500M, with
$68M revenue in 2006, is expected to show a loss of 5 cents a
share for the full year 2007, but projects $1.16 EPS for 2008. The
stock has traded in the $20-a-share range recently, with its twelve
month range 6.50-31.44.
So once investors or traders acclimate themselves to the specifics
of the alternative energy field—which is becoming more and more
mainstream by the day—they can make more informed and what
they hope are profitable decisions.
February 12, 2008
By Greg Sushinsky
With so much green talk in the air, if you’re an investor interested
in getting into alternative energy, you can take your pick buying
anything from ethanol to wind to solar, or you can focus on less than
pure plays such as the waste industry, or you can come up with your
own combinations of such investments. Whether you choose to go
with large caps, mid-size, small or micro-caps--often those newest
and most innovative of companies and stocks, you need to know the
lay of the land a bit.
Most of the payoff in terms of actual profits, industry observers
feel, will be down the road for these companies. Re-cycling waste,
hybrid cars, and so on, are technologies that while available, are not
yet fully locked into the mainstream or economic pipeline in the
same way as, say, electric utilities. This is why many investors trade
the micro-caps in this sector, as technological advancements with
future earnings implications—sometimes far in the future—are more
the norm than the exception. But with growth rates, despite some
bumpy travel, predicted at up to 40% in the next few years, you can
see the appeal of these stocks. For the more long-term or value
investor or someone who wants some tangible earnings to look at
now, there are growing companies involved in the alternative energy
industry producing that right now: solar power stocks.
The solar stocks, which due to their technology are often classified
along with semi-conductor stocks, but which more properly belong to
the energy sector, are a group which is both producing energy and
revenues right now. Two such stocks, First Solar, Inc. (NASDAQ:
FSLR) and Canadian Solar (NASDAQ: CSIQ), are good examples.
This year, despite some downturn in the commitment to increase
government incentives for adding solar (mainly in Canada), these
stocks continued to make some headway. As in mainstream energy,
other factors play into the rise and fall of the immediate business
fortunes of these companies. This year, there was an increase in
demand for ethanol, while solar was down. The alternative energy
sector is still small enough so that increases in business in one
segment sometimes show a related reduced spending on another
alternative segment.
First Solar, a Phoenix, Arizona company which both designs and
manufactures proprietary solar modules, has a market cap of $13.5
B, and which is due to report earnings report earnings on
Wednesday, February 13 (tomorrow) before the bell, is expected to
announce 53 cents a share earnings for the fourth quarter and
$1.16 for the full year 2007. Analysts’ projections have earnings for
2008 slated at $1.98 per share. The stock was recently at 189, and
has traded from 32.60-283.00 in the last year.
Canadian Solar, by contrast, has a market cap of $500M, with
$68M revenue in 2006, is expected to show a loss of 5 cents a
share for the full year 2007, but projects $1.16 EPS for 2008. The
stock has traded in the $20-a-share range recently, with its twelve
month range 6.50-31.44.
So once investors or traders acclimate themselves to the specifics
of the alternative energy field—which is becoming more and more
mainstream by the day—they can make more informed and what
they hope are profitable decisions.
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