There is the concern that today's guidance bump was mainly due to the recognition of the massive California power plant this year. Our friend Glenn Williams over at RealMoney, argues that the time for solar power is upon us. While he sees more opportunity in the solar power producers, I think that the manufacturers should also benefit from the proliferation of solar power plants. Of course, the competition among manufacturers will remain tough, but the fact FSLR will reduce production costs by over 40% by 2017 will certainly benefit the company.
In addition, FSLR has a solid balance sheet which will help support further investment in technology, innovation and cost reductions.
FSLR now expects 2013 net sales of $3.8 billion to $4 billion and EPS of $4.00-$4.50, excluding one-time items. That compares with analysts' estimates of $3.1 billion in sales and EPS of $3.51.
Bottom line, it probably makes sense to let the stock settle and shake out all the shorts before getting involved. If the shares get back to the $20s, it might be worth a look.
Mark: First Solar (FSLR) is soaring today. The stock hit a new 52-week high of $41 at mid-day, came down a bit but headed back toward that high. Management held a meeting with analysts today and provided 2013 guidance that was significantly better than what the street was expecting.
FSLR is the definition of a short squeeze. This is one of the most heavily shorted stocks out there, with 30% of the float sold short. Today, those shorts are being crushed, which is why the stock rally continues. That will end at some point, and the IV will come in as well. This type of movement might get one more day out of it. Then IV will suck out, followed by the stock.
Trades: Sell to open FSLR April 41 calls at $1.65 and buy to open FSLR April 45 calls for $0.63.
Mark can be followed on Twitter at twitter.com/OptionPit.
Lindsey can be followed on Twitter at twitter.com/lindseycbell
OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits.
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
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
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas