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

Pay Attention When Wall Street's Biggest Solar Bear Gets Nervous

NEW YORK ( TheStreet) - When the biggest solar stock bear on Wall Street -- an analyst selected by CNBC for one of the "shorts of the year" in 2011 -- gets nervous about sell ratings on solar stocks, pay attention.

A report from Deutsche Bank suggesting that solar demand may improve more than expected in 2012 and that pricing may stabilize led to a monster rally in solar stocks, but that report may not be the most telling read from the solar analyst ranks.

If you don't trust Deutsche Bank, you might want to take a look at the flurry of reports put out by Axiom Capital analyst Gordon Johnson -- sent with red exclamation marks in the email subject line -- removing his sell rating on five solar stocks, including First Solar (FSLR - Get Report) -- the aforementioned "short of the year" and a stock which he just lowered his price target on last week, to $26. First Solar rallied to above $42 on Wednesday.

When Johnson lowered his First Solar price target but commented in the change that the First solar short had "almost run its course," one peer solar analyst commented that it was as good a sign of a bottom in solar as any other data point.

And that was before it became known on Friday afternoon that Germany had installed 7.5 gigawatts of solar in 2011 thanks to a huge fourth quarter, a typical short-term frenzy driven by declining subsidies in the world's biggest solar market. The subsidy-driven trade in solar may be a signal of much that is wrong with the economics of the sector, but it's also always been a driver of trading and short-term gains in solar shares.

Johnson removed sell ratings on First Solar , Yingli Green Energy (YGE - Get Report), Trina Solar (TSL - Get Report), Suntech Power (STP) and Power-One (PWER - Get Report).

He didn't move to a buy, but moving to a neutral was enough to signal that the great solar short may have run its course -- or at least this course of the great solar short may be completed.

The rationale provided by Johnson for moving to the sidelines on solar stocks was good evidence of the prevailing solar bearishness swinging back to a more optimistic view, at least as a near-term trade.

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
SYM TRADE IT LAST %CHG
YGE $1.11 -1.80%
STP $0.53 0.00%
PWER $0.00 0.00%
FSLR $55.13 -1.40%
TSL $12.60 1.00%

Markets

DOW 18,227.55 -58.19 -0.32%
S&P 500 2,128.38 -2.44 -0.11%
NASDAQ 5,094.1710 +3.3770 0.07%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs