This Day On The Street
Continue to site
ADVERTISEMENT
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 Selloff: Advanced Energy Industries

NEW YORK ( TheStreet) -- It was solar inverter company Advanced Energy Industries (AEIS - Get Report) turn to take a beating from investors on behalf of the solar inverter market, which has been hit hard in the past two weeks.

Advanced Energy Industries shares were down more than 10% in the early afternoon on Wednesday and trading was above the full day average volume.

The solar inverter market took a tumble last week after the world's largest inverter maker, Germany's SMA Solar, provided a cautious outlook about 2011. Power-One (PWER) was the big loser in the bunch, down 25% in the past week before a comeback today after it announced a share buyback program.


Advanced Energy Industries is a different story as it is more closely tied to the semiconductor market than Power-One, which has transitioned more substantially to a solar inverter company. With this in mind, there were several contributing factors to the Advanced Energy Industry selloff on Wednesday, and just one potential trigger was related to its inverter business.

Advanced Energy was among a group of semiconductor stocks downgraded by Bank of America/Merrill analysts on Wednesday, seeing its rating cut to hold from buy. Investors went straight past the hold when it came to Advanced Energy's shares though, and simply sold in droves.

The AEIS selloff was definitely linked to the Bank of America/Merrill call on semiconductor stocks. However, one might ask why AEIS was down more than MKS Instruments (MKSI - Get Report), downgraded by Bank of America from buy to sell. MKS Instruments shares were down by more than 8%, less than AEIS's 10% decline, even though the Bank of America call was less negative on AEIS shares.

This could be where the solar inverter market segment of AEIS' business came into play, though it may also be a stretch to read too much into the selloff beyond the general bear case for semiconductor stocks. On Tuesday, Sharp acquired private solar power project developer Recurrent Energy, for which AEIS has been a significant supplier of solar inverters, according to industry analysts.
1 of 2

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
PWER $0.00 0.00%
AEIS $26.19 0.00%
MKSI $35.50 0.00%
AAPL $121.30 0.00%
FB $94.01 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs