7 Solar Energy Companies On Watch If Panel Prices Bottom

The continuing rise in shares of First Solar (FSLR) makes it worth taking a second look at the solar energy sector. First Solar is up 140% after hitting a bottom in June 2012:

By comparison, LDK Solar (LDK), Trina Solar Ltd. (TSL) and JinkoSolar Holding Co. (JKS) all reported weaker quarterly revenues. The industry is being hurt by oversupply, lower demand. This led to flat to negative margins for suppliers.

Solar prices are down 21%, and Trina Solar may now want to set a floor price to cap further declines. If rivals do the same thing, this may mark the bottom for more losses.

When Trina reported results, the company saw sales decline, to $298 million, nearly 40% compared to the year before. Shipments declined 9.2% to 380 megawatts.

Trina is operating at 50% of capacity. By comparison, First Solar was operating at an 83% capacity, during its quarter. First Solar forecasts it will run at 90 to 95% in the next quarter.

LDK, Trina, and First Solar Compared:

Solar Prices Could Be At a Bottom

Panel prices averaged 79 cents a watt on November 5, 2012, up from an all-time low of 67 cents a watt reached on September 24.

Supply Glut Could Alleviate

If manufacturers stop chasing market share, the excess supply of solar panels could alleviate in the next few quarters. This will also help companies generate a profit instead of a loss for each sale.

Other Solar Energy-Related News

Canadian Solar (CSIQ) received financing to construct a 49MW solar project.

LDK Solar (LDK) beat estimates in its quarterly results, but guided far lower revenue. The company now expects revenue to be between $230 million – $290 million. The previous consensus estimate was $552.4 million.

First Solar (FSLR) won a small project in China’s Xinjiang province to supply 2 MW of modules.

Business Section: Investing Ideas

Looking to follow the trend? Keep in mind  First Solar has the strongest upside and should be the first solar energy company to look at. The company is concentrating on grid-energy supply instead of rooftop solar.

First Solar, Inc. ( FSLR, Earnings, Analysts, Financials): Manufactures and sells solar modules using a thin-film semiconductor technology. Market cap at $2.58B, most recent closing price at $29.61.

 

 

Smaller manufacturers, in order of increasing market capitalization, should be monitored for quarterly changes in output levels. They are:

 

Yingli Green Energy Holding Co. Ltd. ( YGE, Earnings, Analysts, Financials): Engages in the design, development, manufacture, marketing, sale, and installation of photovoltaic (PV) products in the People’s Republic of China and internationally. Market cap at $284.98M, most recent closing price at $1.82.

 

Trina Solar Limited ( TSL, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells photovoltaic (PV) modules worldwide. Market cap at $234.35M, most recent closing price at $2.88.

 

Suntech Power Holdings Co. Ltd. ( STP, Earnings, Analysts, Financials): Engages in the design, development, manufacture, and marketing of photovoltaic (PV) products. Market cap at $157.61M, most recent closing price at $0.87.

 

JA Solar Holdings Co., Ltd. ( JASO, Earnings, Analysts, Financials): Engages in the design, development, manufacture, and sale of photovoltaic solar cells and solar products, which convert sunlight into electricity in the People’s Republic of China. Market cap at $145.61M, most recent closing price at $0.72.

 

Companies less known as component suppliers to the solar energy sector include:

 

E. I. du Pont de Nemours and Company ( DD, Earnings, Analysts, Financials): DuPont engages in manufacturing, seed production or selling activities and some are distributors of products manufactured by the Company. Market cap at $39.61B, most recent closing price at $42.48.

 

Applied Materials Inc. ( AMAT, Earnings, Analysts, Financials): Provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. Market cap at $13.46B, most recent closing price at $10.88.  The company sees a glut in solar panels and displays for TV. It recently cut its workforce by between 6-9% to reduce costs.

 

 

Further Reading:  7 Reasons To Like First Solar

 

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