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

Top Three Solar Stocks for Earnings Season

BOSTON ( TheStreet) -- Solar stocks have heated up, driven by optimism about industry consolidation and an economic recovery. The Guggenheim Solar ETF (TAN) has risen 5.9% in four weeks. The fund's top holdings, First Solar (FSLR), Trina Solar (TSL), MEMC Electronic Materials (MEMC), SolarWorld (SWV) and JA Solar (JASO) have gained as much as 12%. Still, there are preferred plays in the solar space.

The safest way to invest in green energy is through exchange traded funds, such as the Guggenheim Solar ETF. Other notable options are PowerShares WilderHill Clean Energy Portfolio (PBW) and the Van Eck Global Alternative Energy ETF (GEX), which emphasizes large-cap stocks.

Heading into earnings season, the following three stocks receive the highest reviews from analysts. In the following pages, they are ordered by aggregate rating from great to best.

3. JA Solar (JASO) is a Shanghai-based cell manufacturer with a record of outstanding growth. Since 2007, JA Solar has more than doubled its annual revenue, on average, and has amplified its net income by 81% a year, on average.

Q2 Review: JA Solar swung to a second-quarter profit of $29 million, or 18 cents a share, as revenue quadrupled to $353 million. The gross margin widened from 11% to 23% and the operating margin climbed from negative territory to 15%. At the end of the quarter, JA held $339 million of cash and $352 million of debt, equal to a quick ratio of 3.3 and a debt-to-equity ratio of 0.4. Return on equity improved to 13%. Return on assets climbed to 8.1%.

Analyst Opinions: Of analysts covering JA , 13, or 59%, rate its stock "buy," eight rate it "hold" and one ranks it "sell." A median target of $10.87 suggests a 12-month gain of 30%. The stock has risen 47% in 2010 and 5.3% in the past month. Yet, it has delivered an annualized three-year return of negative 16%. Macquarie (MQBKY) predicts that the stock will more than double to $17.50. Jefferies (JEF) forecasts a rise of 67% to $14. Bearish bank RBC (RY) rates JA Solar "sector perform" with a $7 target, implying 17% downside.

Earnings Season: JA is forecasted to post third-quarter sales of $435 million. The consensus estimate has risen $1.8 million in the past month. JA is projected to deliver adjusted earnings of 32 cents. The consensus has increased by 2 cents in four weeks. JA has an earnings-surprise average of negative 2.1%. It missed the second-quarter earnings consensus by 26%. Its stock fell 8% on the news. It beat the first-quarter consensus by 35% and its stock still dropped, by 7.5%. So, recently, JA is an earnings-season underperformer.

Valuation: JA's stock trades at a forward earnings multiple of 7.2, a book value multiple of 1.8 and a sales multiple of 1.3, 45%, 50% and 58% discounts to industry averages.
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
AAPL $95.06 -0.13%
FB $117.34 -0.08%
GOOG $694.12 0.25%
TSLA $232.08 -0.10%
YHOO $35.95 -0.17%


Chart of I:DJI
DOW 17,718.82 -32.09 -0.18%
S&P 500 2,054.49 -8.88 -0.43%
NASDAQ 4,744.7920 -18.4320 -0.39%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs