STP or FSLR .....which is a BETTER buy NOW ?

Solar industry stocks are all over the place...........some are being trashed while some are trading @ sky high valuation and has momentum.

FSLR is one stock which has momentum...even in this bad week.

FSLR is always the first one to turn GREEN even on bad days.

TSL is trying to find support around $41 area.

But my portfolio stock STP is showing the most weakness.....it is trading @ the lowest level in the last 6 months.

On friday STP went below 200 day MA $32.35 and close @ $31.70..........

Is STP being manipulated to $30 for triple witching this friday...or it is a reaction to the WORST Q since IPO............missed estimates by 5 cents on a fully diluted & GAAP basis........

I think it is the later.........so if you miss and do not manage the street well.....STP is paying a very heavy price.

FSLR is the opposite case.....they are managing the street better UPOD is the name of the game.

FSLR is trading @ $71.22 only $2.04 below its all-time HIGH of $73.26 in this weak market.

So......where do we go from here.....let us compare FSLR & STP going forward............It is ALWAYS about ...what have you done for me lately.....so here is a head to head comparison in this solar derby race :

..................FSLR....................STP

Sales Q2.........$74.66m...........$283.73m
YOY............na...................+123.4%

EPS Q2...........o3 cents.............23 cents
YOY..........na.......................+35.2%

Sales 2008..$634.24m.............$1.69B
YOY..........+63.7%...................+41.8%

EPS 2008.....$1.12....................$1.58
YOY............+115.3%..............+51.9%

PE on 08........63.59...................20.06

If you compare the pe growth rate & the current pe given....FSLR should be trading @ 2.22 times STP pe but it trades @ 3.16 times of STP PE......a further premium of 42.3%......this proves that wall street will give much higher PE if you have sales & eps MOMENTUM.....which FSLR currently is showing.

So...what do I do with STP.............well there is HOPE......analyst consensus for this Q increased by 1 cent........STP has a good chance of beating this Q consensus......so after earning we will trade close to $45 which is a fair value.....which still will be less than half PE of FSLR.

On a risk to reward ratio....downside risk on STP is less than $2 and UPSIDE of $13...in next 70 days..a potential gain of 41%....I think I can WAIT for that.

Please do your own due diligence as I own STP in my portfolio.

BLOG does not give buy or sell.

Saleem