(Updated for Tuesday close, slide in euro)
NEW YORK (
) -- The best of China's solar-stock cadre and the most-embattled of the U.S. solar leaders took it on the chin in Monday and Tuesday's trading session.
The formula for trading shares of solar-energy companies has been fairly simple over the last two weeks, and it set up Tuesday to be another day during which fundamentals in specific solar companies and the solar demand outlook for 2010 meant little when compared to the European continent.
Even the best of the solar energy stocks have been hit hard.
. The investor favorite had risen as high as $31 in January -- from a 52-week low of $8 (adjusted for its subsequent stock split, that 52-week low in Trina shares would actually be $4). But Trina's stock led losses in the solar sector on Monday, declining 9% to a share price just above $18. Trina shares have not been as low as their Monday closing price since last November.
On Tuesday, even though early morning stability in the euro seemed like it could be a salve to solar's wounds, the euro couldn't hold, and by the end of Tuesday it had slid to yet another new 14-month low.
Trina Solar's losses were again the largest on Tuesday among solar stocks, as the Chinese solar player's rapid rise over the past year from a low share price between $8 and $9 in May 2009, suddenly looks as if it is not so far in Trina's past.
Trina Solar shares ended Tuesday down 10%, or $1.83, to $16.46. It was also another very heavy day in Trina Solar share volume, with close to 12 million shares traded, versus an average daily volume of 4 million shares. And to think, when Trina decided to split its stock not that long ago, it thought the additional liquidity would be a good thing.
has seen $40 of its share value eroded in less than three weeks, and is now back where the solar bears always thought it should be trading, at $110 as opposed to $150, a price First Solar shares had reached on April 29.
Must Read Solar Stock Villain: The Euro
, which recovered from an accounting crisis in late 2009 -- only to see its fourth quarter and first quarter 2010 earnings send its shares ever lower -- reached another all-time low, just over $12, on Monday. Of course, that all-time low lasted for one day, as the euro's continued deterioration on Tuesday led SunPower shares down another 4%, in continued heavy selling -- close to 5 million shares traded on Tuesday versus average daily volume of 3 million shares.
At the close on Tuesday, SunPower shares were at $11.60.
For the sake of long-term comparisons, SunPower shares debuted in their IPO at $27, and reached $133 in December 2007. It was only after SunPower's delayed fourth-quarter results that the company's stock slipped below $20 for the first time since its IPO in 2005.
put out a note saying
earnings could fall by as much as 80% year-over-year in 2010 based on the euro depreciating to $1.25. Suntech's earnings could crater by as much as 125% if the euro falls to $1.20, Barclays said.
Suntech shares hit a 52-week valley -- one of several recent such lows -- on Monday, and again on Tuesday, dipping under the $10 mark for the first time since March 2009. Of course, in March 2009, Suntech shares were close to $5, so there is always a bright side to look on.
The euro which had hovered above the $1.24 mark in European trading as the U.S. markets opened on Tuesday, was just toying with the markets before slipping into its now regular role of slipping. The news from Germany that a short ban was being put in place on shares of European financial stocks -- echoing back to the worst days of the Great Recession -- only exacerbated the trigger-happy selling in solar stocks and across other sectors.
The only solar stock with outsized gains on Monday was the struggling U.S. residential solar market play,
, which announced a deal to brand its solar panels for the U.S. market with
Of course, percentage gains in a stock as small as Akeena are relatively meaningless. Akeena shares were up 9%, or 9 cents, to just $1.02 a share at the close on Tuesday.
Previous Akeena "brand name" deals have not made a big difference. Akeena announced last year that its "do-it-yourself" solar panels were available at Lowe's stores. However, after a short-term spike in Akeena shares on the Lowe's news, profits still continue to elude the company.
Many solar bears would say that the solar industry is just getting what it deserves. If companies tie their fortunes to government subsidies on one continent, investors shouldn't expect the stocks to trade on anything other than the fickle nature of government policy from one day to the next.
If it's a day of market euphoria and the bailout package to rescue the European Union and the euro are ascendant, solar stocks will rally. The more common sort of trading session lately has seen investors hitting the panic button on European debt concerns and sending the euro to fresh lows, with solar-energy stocks paying a heavy price.
Just when will the bleeding end for solar energy stocks?
Last week's recovery in solar stocks was minor compared to the recent euro-triggered selloff. Solar stocks staged a big rally day last Monday when the markets were buoyed by optimism about the European Union bailout package for Greece.
However, anyone who has monitored the situation in Greece in 2010 knows that, day to day, the euphoria in Europe linked to a prospective bailout has been quickly followed by panic, and heavy selling in equities.
Some analysts say that the current euro-triggered selling is actually offering attractive entry points for solar stocks.
But analysts that had upgraded SunPower last week when it slipped to $14 a share, a call based on nothing more than valuation, learned the hard way that it's not that simple, given the day-to-day fluctuations in European sentiment.
That SunPower slipped to $12 by the close Monday, and again on Tuesday, shows just how hard it is to call a euro-related floor in solar shares.
The big winner on Monday among solar stocks was
, which was upgraded by Merrill Lynch in Asia directly from underperform to buy, and ended the day up 2.5%.
There were actually a few Chinese solar stocks that managed positive returns on Tuesday,
. However, with gains of 6 cents each to share prices, these were not the type of stand out solar stock performers that the sector has been accustomed to showcasing.
There has to be a floor to solar losses at some point -- after all,
was at $3.37 a share in September 2009 -- and even after its big losses in the past few weeks, JA Solar was still trading at $5.50 at the close on Tuesday.
Yet a larger question remains for solar investors, beyond the fear that the euro could still go lower, beyond the fear that earnings expected in the second quarter 2010 will be eaten into by forex charges, and beyond the fear that cuts in solar subsidies by European governments saddled with debt will come sooner rather than later. It all raises the larger question: is the thought that there will be an inflection point for solar stocks out on the 2011 horizon, bordering on wishful thinking at this point?
Then again, if JA Solar could trade at $3.30 less than a year ago, and First Solar can shed $40 from its share price in less than three weeks -- after having added $20 to its share price in one trading session after its first quarter earnings -- it may be wishful thinking to believe that there is such a thing as a comprehensive inflection point for solar stocks, as opposed to a steady series of mini-inflections.
-Reported by Eric Rosenbaum in New York.
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