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

Solar Stocks That May Not Survive to 2014

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

SunPower (SPWR - Get Report)
SunPower shares are up 16.5% this month.

Unlike First Solar, Simko has little hope for this company.

"SunPower is in a horrible situation. To me, it's a huge problem and a Total executive recently pegged it right when he said it would be bankrupt without the investment by Total."

Total (TOT) took a majority stake in SunPower in the middle of 2011, and recently upped that stake in exchange for SunPower buying its European-based solar company Tenesol.

As for the remaining SunPower shares that trade publicly, Simko says that SunPower is in the same boat as the high-cost European solar panel makers that find it difficult to compete in today's low-priced panel world.

Simko said SunPower's recent track record of underwhelming financial results speaks volumes: SunPower lowered its 2011 guidance three times over the course of the year.

"The last time they made money was in the fourth quarter of 2010 and that was it for them," Simko said. The fourth quarter of 2010 was a huge boom quarter for solar stocks when Italy installed more solar projects than anyone had foreseen. Yet to show how quickly the situation reversed itself, Italy's demand outlook is now a headwind for solar and SunPower has had to write off much of a solar project pipeline it bought in Italy.

"They get no benefit from that pipeline now," Simko said.

At the end of the day, the key difference between First Solar and SunPower -- the two largest U.S. solar panel makers -- is the cost structure. Even if First Solar can't make much money, if any, selling modules, it is saved by the pipeline business. SunPower, with Total's backing, may develop a project business that does better, but they haven't shown the ability to make profits in the new solar reality.

"Lots of promises and nothing delivered," Simko said. That is, except for one very timely acquisition by an oil major, but that doesn't help holders of the outstanding SunPower shares now.
5 of 7

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
STP $0.53 0.00%
DQ $25.95 -3.71%
FSLR $55.84 -2.07%
SPWR $20.14 -4.32%
AAPL $93.74 -1.15%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs