Solar stocks are on fire........
Is solar stocks in BUBBLE........
In my opinion NOT YET......
So.....the logical question is how we value each solar stocks.....
I will try to come up with reasonable expectations of each solar stock....
Which metrics I am going to use.......the most reliable of all......popularly known as EARNINGS...
In the end earnings matter......
What I have observed that when any sector is HOT HOT HOT.....then 30X earnings in tech sectors is achieved easily......
I believe Solar is a tech category........
30X earnings is a fairly reasonable/CONSERVATIVE price target for each solar......
Those solar stocks which have NO earnings currently...will be anomaly in my scenario...as they are ALREADY trading @ sky high prices.......and may go HIGHER !!!!
SEE...on wall street..it IS HERD MENTALITY.......everybody piles on one hot sector till it is UP 400% in a year......
Are we going to see the same scenario in solar stocks......I believe so.....
WHY.....
Because we are entering a bull phase in the markets also.....so Solar IS the new & WONDERFUL idea...based on global warming issues which even GWB has accepted NOW.......
By the way all those HOT HOT HOT sectors will give way to Solar NOW......
SO...fasten your seat belts and be ready for some crazy TAPE in Solar.........
So HOW HIGH we go in each solar.......
Here is my breakdown for some stocks where earnings DO EXIST......
LDK $1.67 in 08 x30=$50.10..$3.78 in 09 x 30=$113.40
currently trades @ $37.22 08 PE=22.29
SOLF .74 cents in 08 x30=$22.20...$1.25 in 09 x30=$37.50
currently trades @$22.84 08 PE=30.86
TSL $3.11 in 08 x30=$93.30...$4.17 in 09 x30=$125.10
currently trades @ $49.53 08 PE=15.03
SOL $1.28 in 08 x30=$38.40...$1.97 in 09 x30=$59.10
currently trades @ $26.04 08 PE=20.34
CSIQ $1.52 in 08 x30=$45.60...$2.79 in 09 x30=$83.70
currently trades @ $44.90 08 PE=29.54
Now the question is can solar stocks go to 40X PE........yes they CAN......
Why do I do these comparative analysis.......to have a RIMM by RIMM comparison...then only you can see the quality of your own decision making...in BUYING or SELLING......
Most solar stocks are OVERBOUGHT on historical RSI numbers......but they CAN stay overbought & even go HIGHER in a bull market...where we are RIGHT NOW.......
So my conclusion SOLAR IS HOT HOT HOT !!!!!!
SO...GO AHEAD & MAKE YOUR SOLAR DAY !!!!
Here is my $ weighting as of Fridays close:
NTES 16.6%
SOL 5.0%
RIMM 37.3%
TOL 12.3%
V 28.8%
As you can see .....I am clearly underweight in Solar...which will be corrected ASAP !!!
Please do your own due diligence and ensure your own comfort level......
Always stay DIVERSIFIED in many sectors.
BLOG does NOT give buy or sell.
Saleem
Saleem,
ReplyDeleteAfter doing some DD, I was ready to pull the trigger on SOL tomorrow morning. I then went on clearstation and looked at the chart. Its been almost a parabolic move up, does this give you any concern? Instead chasing this, I think I'll pause and wait for a pullback to the 22.80 area.
What are your thoughts on this?
Hi Victor,
ReplyDeleteThese days Solar are going crazy...i have already traded SOL once...I am trying to build position....
CSIQ went double the velocity of SOL...so I am cautiously optimistic that keeping a position in SOL maybe a good idea....
Old TA is not working in SOL or any other solar stocks....
I sold SOL @ $23.55..but had to rebuy @ $25.28....which is my current position....
I want to keep SOL for my next trade......
It is a tough call to make as to when to buy......
Good luck on your decision.
Saleem
Hi Saleem,
ReplyDeleteCongratulations on SOL. I have a feeling you're right on solar stocks and have heard CSIQ is headed to 80. Any thoughts on ASTI in solar space? I like that it just came out with a new share offering thereby triggering a pullback while the other solars jump ahead. One fear I have about buying solars that have jettisoned up is that they often come out and announce a new share offering. ASTI just got that out of the way. Anyway, your thoughts appreciated.
Beatrice
SALEEM
ReplyDeleteHappy Sunday to ya
I read tha tPakistan is have more trouble! I am sorry.
I put a Monday morning order in @$25
let us see if I get SOL.
I am also looking at HAL. Best of breed in OIL RIGS & equipment.
If AAPL sells of again on Monday maybe I get some of that I do not wnat ot own to many stocks As I gotta focus.
Have you looked at my PQ, Nat Gas is on fire to. All the oils on Friday were blasting higher.
Have a good evening my friend
M
Saleem,
ReplyDeleteForget my ASTI comment...after looking more closely, I'm not very interested in it.
Am curious about V and MA. Any reason for choosing V over MA? I'm holding a bit of both right now.
Best,
B
SALEEM
ReplyDeleteHere is IBD take on SOL: I like it here a lot, yes extended but best in the group:
Renesola Ltd Ads
Symbol:
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Current Price: $26.04
Exchange: NYSE
Industry Group: Energy-Other
Overall Rating: (98 = A+)
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Stock's Diagnosis
Technical Rating (93 = A) Group's Technical Rating (89 = B+)
Fundamental Rating (99 = A+) Group's Fundamental Rating (96 = A)
Attractiveness Rating (75 = B-) Get These Ratings On Your Cell Phone!
Renesola Ltd Ads's Rank within the Energy-Other Group
worst best
Overall Rank: 2nd out of 83 stocks
worst best
Technical Rank: 17th out of 83 stocks
worst best
Fundamental Rank: 1st out of 83 stocks
worst best
Attractiveness Rank: 30th out of 83 stocks
Note: There are cases where two or more stocks have the same Rank within an Industry Group. This reflects that the companies had an equal rating after computing and weighting all components in the category.
Top 5 Companies in the Energy-Other Group Stocks Above $10 - Sorted By Best Overall Rating
First Solar Inc FSLR
Massey Energy Company MEE
Arch Coal Inc ACI
Renesola Ltd Ads SOL
Gushan Enviro Energy Ads GU
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IBD Stock Checkup Analysis:
Renesola Ltd Ads receives an overall rating of A+, which is in the 98th percentile of all stocks in the Investor's Business Daily database. The overall rating is calculated using five proprietary ratings that measure each stock's Technical and Fundamental qualities and the Technical and Fundamental qualities of the industry group that it resides in, as well as a rating on the stock's current price attractiveness.
Renesola Ltd Ads receives a Technical Rating of 93, which places it 17th out of 83 stocks in the Energy-Other group.
Renesola Ltd Ads receives a Fundamental Rating of 99, which places it 1st out of 83 stocks in the Energy-Other group.
Renesola Ltd Ads receives an Attractiveness Rating of 75, placing it 30th out of 83 stocks in its group.
The Energy-Other group's technical rating of B+ ranks it in the 89th percentile of the 197 different Investor's Business Daily Industry Groups. The Energy-Other group's fundamental rating is A, ranking it in the 96th percentile of all groups.
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99 99 A+ A A+
Hi Beatrice,
ReplyDeleteNice to see your note.
History is a great teacher of stock price movement.
V & MA have interesting valuation.
V IPO came @ a time when stock market was in total freefall...thus was priced cheap....
V low valuation is very evident by one well known metric...price/book
V is only 3.28 while MA is 11.84 as of fridays closing price....
So MA is priced 3.61 times HIGHER...
This puts V in-line to quadruple from IPO price..in due course !!!
Saleem
Hi Madmax,
ReplyDeleteThanks for your concern re Pakistan...politics is not my interest @ all.....Politicians as a group do not score much in my books.....
Thanks for posting IBD take on SOL...do not lose sight of the fact that SOL is 5 on IBD 100 this week...which will get the attention of millions of buyers......especially institutions!!!
Technical buying is the rage these days....SOL is UP there near TOP !!!
Saleem
Saleem,
ReplyDeleteThanks for the book value info on V and MA.
Beatrice
GOOD MORNING SALEEM
ReplyDeleteI love V and SOL NTES could buy some more on todays dip? What you think
They are flying!
I got some SOL today at $26.04
And HAL at $49, I had to get the RIGs
in my portfolio.
Lets cheer for the breakout in Visa
Looking for $85
M
Good morning Saleem,
ReplyDeleteSOL is going, good call. GNA is coming out of its shell, GSI is bouncing back after IR sell off. Have a good day trading. I'm off to my real job.
Victor
Hi Madmax,
ReplyDeleteGood move on SOL......
Yes NTES is a good-on !!!
Saleem
Hi Victor,
ReplyDeleteYour picks are very thoughtful....
Good luck on your double day job..
Saleem
SALEEM
ReplyDeleteSOL made hte big money listing today
Stocks RISINGFALLING on unusually high volume. Learn More about Stocks On The Move.
5/19/2008 Updating...
Stock
Symbol Company
Name Stock
Price Price
Chg. Vol
% Chg. Research Tools
SOLF Solarfun Pwr Hldgs Ads 26.30 +3.46 +973
GEOI Georesources Inc 25.15 +3.06 +879
ENS Enersys 30.17 +0.66 +689
SOL Renesola Ltd Ads 28.48 +2.44 +561
EXM Excel Maritime Carriers 60.20 +2.48 +443
CYBS Cybersource Corporation 19.86 +0.65 +393
PSEM Pericom Semiconductor 18.16 +1.03 +373
ACM Aecom Technology Corp 31.40 +1.20 +363
DSX Diana Shipping Inc 40.24 +1.24 +355
TITN Titan Machinery Inc 24.90 +1.38 +340
VIP Vimpel Communications 35.58 +1.99 +264
CSIQ Canadian Solar Inc 47.92 +3.02 +255
YZC Yanzhou Coal Mining Adr 109.24 +7.51 +255
VISN Visionchina Media Ads 22.84 +1.23 +241
JRJC China Finance Online Ads 26.97 +0.82 +240
MBT Mobile Telesystems Adr 84.58 +4.33 +238
LDK L D K Solar Co Ltd 40.75 +3.53 +234
DRYS Dryships Inc 116.10 +5.36 +226
TSL Trina Solar Ltd Ads 52.64 +3.11 +205
AMZN Amazon.Com Inc