NEW YORK (TheStreet) -- Long-term and short-term bullishness were evident in the best solar stock performers on Monday.
LDK Solar (LDK) surged on Monday by 20% on the strength of a fourth quarter earnings pre-announcement that exceeded Street revenue consensus. LDK also released revised guidance for 2011 that exceeded its previous revenue and business targets across polysilicon, solar wafer, cell and module production.
At the same time, SunPower (SPWRA) shares surged by 8.8%, after the U.S. solar company announced more 711 megawatts in projects sold to Southern California Edison and slated for development from 2014 to 2016.
For LDK, the bullish news about the fourth quarter performance and 2011 outlook run counter to lots of solar supply chain noise about recent prices decline, particularly at the level of solar cell manufacturers. Indeed, another report in Digitimes on Monday stated that the gross margins of Taiwan-based cell makers could fall below 10% in the first quarter of 2011, with cell pricing per watt falling below the $1.20 mark at which many cell manufacturers break even.Hapoalim Securities reported on Monday that channel checks in Europe show module pricing down by 5% to 10% in the first quarter -- $1.55 to $1.60/watt. It should be noted that both LDK and SunPower are among the large group of solar stocks that remain favorite targets of shorters -- and, therefore, any positive news, particularly bullish earnings pre-announcements, will lead to a round of short covering. LDK trading volume was huge on Monday, with more than 20 million shares changing hands on Monday, and gain of 20% for the Chinese solar stock. Typical volume for LDK is in the range of 3.6 million. There were 15.8 million shares short on LDK as of the most recent Nasdaq short interest report on Dec. 15.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV