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Needham Puts Buy Back on SunPower

In another sign of confidence that SunPower's accounting woes won't sink the solar company, Needham places a buy rating back on SunPower.

SAN JOSE, Calif. (


) --



received another vote of confidence from the research community on Thursday morning when Needham put a buy rating back on the solar company's shares.


SunPower provided an update on the accounting investigation that was first announced on Nov. 16. The SunPower update on the investigation was terse, saying only that the results of the internal investigation suggested no widespread problems and were in line with its original announcement from November -- an isolated accounting problem at a remote unit in the Philippines.

Some analysts continued to be skeptical -- and argue that if a problem is isolated at a remote location, that should set off alarm bells about a company CFO's lack of control -- but

SunPower has received a number of ratings upgrades in the weeks since it launched the internal investigation. The 20% whack from SunPower's Nov. 16 share price has widely been seen as a buying opportunity.

In the case of the Needham upgrade to buy, it was basically the reinstatement of the existing rating it had on SunPower, which the research firm felt it had to remove temporarily until SunPower provided an update on the investigation.

"We talked about it since yesterday's announcement and felt it was OK to get back to where we were before, with a buy rating," said Edwin Mok, Needham analyst. Mok explained that his views were in line with the overall market reaction to the SunPower statement yesterday: a net positive. "I had already factored into my models what SunPower had previously said, and my forward assumption is that with demand pretty strong and the accounting situation not any worse than initially thought, SunPower goes back to a buy," Mok said.

Mok also said he was not concerned that the SunPower statement was less than conclusive. Some analysts had been hoping that SunPower management would definitively put to rest any fears about the accounting investigation turning up more serious issues.

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Mok said in his opinion these accounting investigations always take longer to work through than corporate management teams initially project, and he would not be surprised if SunPower does not even reach a definitive end to the accounting issue until after its next earnings in January.

"It could still be hanging around until some time into the first quarter before it gets resolved, but as stock analyst, I want to have a rating," Mok said.P/>

-- Reported by Eric Rosenbaum in New York.


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