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Daqo New Energy ( DQ)
Daqo New Energy shares are up 58% this year.

Simko has a different view of the Chinese polysilicon producer. "This is another company in big trouble," the analyst said.

The problem for Daqo is, like the panel makers that are struggling, about cost structure. However, in the case of Daqo it is about the market price for polysilicon versus its production price.

Polysilicon prices -- which once upon a time were as high as $300 per kilogram -- recently stabilized at around the $30 range thanks to the German demand pickup. Polysilicon prices were below $30 per kilogram just a month ago.

Daqo New Energy can't do enough to reduce its cost structure.

As Collins Stewart analyst Dan Ries recently wrote, "While Daqo is expanding and retrofitting its polysilicon product facilities to reduce costs...the polysilicon industry is facing a multi-year period of excess capacity. DQ's attempt to reduce its dependence on polysilicon with expansion into wafers and modules seems unlikey to payoff, as those business are extremely challenging even for vendors with brand and scale. If all goes well (production cost reduce to $21/kg from $29-30/kg today), DQ may return to profitability in CY13, but even then, earnings would be minor and its debt load high. We see little value in DQ's equity."

Daqo had cash of $60 million and debt of $269 million as of its last quarterly report in November.

Simko said it's hard to see how the Daqo story pans outs.

"To me, it's one more solar company where we don't know what happens, and it's better to stick with bigger companies with better financial statements."

Overall, Simko's outlook is to proceed with caution. "Solar could become like wind turbine manufacturers. Everyone uses the same technology and wind turbine margins disappear. When supply and demand is out of whack, it's a brutal business and there are very few companies left at the end of the day," he said.

>>To see these stocks in action, visit the Solar Stocks That May Not Survive to 2014 portfolio on Stockpickr.

-- Written by Eric Rosenbaum from New York.

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