This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Top Three Solar Stocks for Earnings Season

Stocks in this article: FSLR SOL TSL JASO TAN SWV MEMC

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

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs