Solar-Stock Sentiment Becomes Tug of War
Updated from 6:59 a.m. EDT
Sentiment is still ruling the solar-power sector. The only thing is, it's not clear right now whether the bulls or bears are going to prevail in the short term.
The bullish case goes something like this: If investors in other sectors start looking for new areas of growth in which to put their money, clean tech is a good candidate. And solar power is one of the brighter spots in clean tech.
After all, with oil prices soaring into the triple digits, homeowners and companies are starting to see the real appeal of solar panels. You pay up front, but you don't have to worry about the costs of generating power. And prices are dropping as capacity booms.Then there's the bearish case. First, many stocks are overvalued. They may be less a safe haven than a fad, as Roger Nusbaum pointed out on TheStreet.com recently. Amid the differing opinions, other issues need to be worked out. Are makers of thin-film solar panels better or worse than more advanced technologies? Thin film is cheaper, but less efficient. Can different technologies coexist in the market, or will one predominate? Will the shortage of silicon linger? Will we soon face an oversupply of panels? What's more, over the weekend the Washington Post published a story that reported that a large Chinese maker of polysilicon, which is used by solar-cell producers, was dumping manufacturing waste outside its factory. This doesn't help advocates of -- and investors in - solar companies betting on the energy as a clean alternative. This is the backdrop behind the tug of war we've been seeing in recent weeks over solar stocks -- just the kind of cocktail of speculation and uncertainty that can lead to volatility in share prices. For example, First Solar
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV