Sunday, June 22, 2014

Here Comes The Sun

A Look At Solar Stocks

Earlier this week I bought TSL as a discretionary selection. Perhaps a bit premature, I have put the cart before the horse. But after the buy, I have performed an analysis of solar stocks and ranked them in MFI fashion.  I have taken the liberty of using forward-looking earnings as opposed to backwards looking, to try and capture the evolution of the industry.

Did I buy the right solar stock?  Let me (ahem) shine a little light on that query.

Solar Stocks

I have tried to compile a list of companies associated with solar.  Certainly this is not an absolute list.  If readers know of any traded in the US and over $100m market cap, please let me know.


Now to keep it real, even with my forward looking earnings, not a single solar stock would make the top 200. I think a lot of this is the return on capital provision, as solar can be pretty capital intensive.

Here is the ranking (the top one is about #330):

Ticker Rank  Stock Price  Market Cap Earnings Yield ROIC Dividend Yield P/B Country
CSIQ 1         29.12        1,607 10% 33% 0.00%        -     Canada
FSLR 2         68.90        7,016 9% 25% 0.00%      1.0   USA
JKS 3         29.61            992 10% 17% 0.00%        -     China
JASO 4         11.01            504 16% 13% 0.00%        -     China
TSL 5         13.07            948 10% 11% 0.00%        -     China
SPWR 6         40.27        6,461 4% 25% 0.00%        -     USA
SOL 7           3.14            319 2% 3% 0.00%        -     China
SCTY 8         69.00        6,307 -1% -2% 0.00% #N/A   USA
YGE 9           4.01            628 -2% -2% 0.00%        -     China
SUNE 10         22.38        5,978 -3% -7% 0.00%      1.0   USA

So as you can see, perhaps my purchase of TSL as my entry into solar was a bit hasty.  It is not the worst, but far from the best (though for earnings yield it is near the top).  I am "stuck" with TSL as I did sell call options on it (one disadvantage of options).  I will watch this group of stocks, if there is a pullback in these names - say 10 to 15%, I would have to consider CSIQ and FSLR. The space is attractive to me as it is one of the few areas that is growing and I think bankruptcies have cleared out some of the competition.

Looking at the table, you do have to wonder at the near cult status of SCTY and the exponential growth of SUNE.

Have a great SUN day!

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