This alert was originally sent to subscribers of TheStreet.com's Stocks Under $10 on Oct. 17 at 11:14 a.m. EDT and is being reprinted here as a special bonus for TheStreet.com readers.

We are adding 400 shares of Evergreen Solar ( ESLR) to the model portfolio. This Game Breaker is trading around the level where we last closed our position in September for a 63% gain, but further research since our sale has convinced us that we may have closed our position prematurely. The stock was recently trading at $8.60.

Evergreen Solar is a leader in creating solar cells to generate power in the U.S. and Germany. The company's patented String Ribbon process requires about 30% less silicon than other systems used by other solar companies. String Ribbon is a valuable competitive cost advantage given the recent supply/demand imbalance in the silicon industry that has pushed raw material costs higher.

Evergreen Solar is not profitable right now. The company lost 81 cents a share in 2004 and is forecast by analysts to lose another 35 cents a share in 2005. However, Evergreen Solar has a joint venture with Germany's leading solar power company, Q-Cells, which should lead to a meaningful increase in both revenue and earnings in the back half of 2006 and beyond.

The EverQ venture, as it is called, is being subsidized by the German government, and the first plant should be up and running by the end of 2006. Evergreen has a 70% stake in EverQ, so it stands to benefit disproportionately from its success. Analysts expect the EverQ plant to drive Evergreen Solar to profitability in the back end of next year as revenue should triple on a year-over-year basis.

In addition to the expected ramp higher in revenue, Evergreen Solar is working to improve its silicon efficiency, which is already among the best in the industry, based on our research. The company is expanding its String Ribbon process to produce even thinner, and therefore less expensive, solar cells through a process called Thin Ribbon. If successful, Thin Ribbon could reduce the company's total silicon requirement by another 50% and lead to improved gross margins.

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