This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Solar Short Calls: FSLR, CSIQ, SPWRA

NEW YORK ( TheStreet) -- The latest Wall Street take on solar stocks comes from Auriga Securities analyst Mark Bachman, who initiated coverage on the sector Wednesday for his new firm.

Despite the bearish sentiment that dominated earlier this year, Bachman agrees with many of his peers in predicting a brighter future for the solar industry.

He joins the Wall Street chorus that remains bullish on Trina Solar (TSL - Get Report), for example. Trina received a big shot in the arm from China on Wednesday when the China Development Bank agreed to lend the company a whopping $4.3 billion -- in effect, a subsidy.

But Bachman parts ways with many of his peers when it comes to several other solar stocks.

The Auriga analyst says the rest of Wall Street has it all wrong on a number of companies, including First Solar (FSLR - Get Report) and Canadian Solar (CSIQ - Get Report). These mistakes will result in some big earnings misses in the near term, Bachman says, and investors ought to prepare for some significant stock-price declines.

Bachman joined Auriga Securities just this month. He had served as senior clean-tech analyst at Pacific Crest Securities from 2003 to 2009, twice making Institutional Investor's All-American Research Team. Previous to Pacific Crest, Bachman was an analyst at Thomas Weisel Partners.

TheStreet asked the Auriga analyst to explain why investors should be long solar, but short on SunPower, First Solar and Canadian Solar.

TheStreet: Overall, you're positively biased on solar in 2010. Do you have any worries about the price declines coming harder and faster than the solar industry's ability to cut costs, related to the feed-in tariff reductions in German, the world's largest solar market?

Bachman: We had the number reported last week by the German government for solar installations in December of 1.46 gigawatts. It was absolutely huge. Some countries can't do that amount of installations in a year.

We know the subsidies are coming down, and we have to accept that. We know that prices are coming down and there will be margin compression. Even with all that in mind, I still think solar systems can generate acceptable returns, and that's the key.

I estimate that the German FIT cuts in the second half of 2010 will result in return levels of 6% to 8% on solar systems.

I also think people underestimate the growth of markets outside Germany. For example, 400 megawatts went into the Czech Republic last year, but how many people were talking about that before it happened? In the neighboring countries, if better returns are possible, the market will migrate. Other countries have been starved for solar modules, since Germany has served as a solar-demand sink.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CSIQ $19.44 0.00%
FSLR $65.07 0.00%
TSL $9.54 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs