It doesn't matter to them that that cumulative installed solar capacity is forecast to grow 374% between now and 2015. It doesn't matter to them that an Obama and Chu-led energy administration will mandate renewable portfolio standards (RPS) with a solar requirement while providing long-term guidance for tax incentives and credits. It doesn't matter to them that capping U.S. emissions, which will happen in the next two years, will make carbon a liability and give it price, making renewables all the more sought after and competitive.
These are the top five names in solar: First Solar, Renewable Energy Corp., Q-Cells, SunPower, Suntech.
This is their stock performance over the past year:
In the best case from those five scenarios, First Solar, the stock is down 26%; in the worst case, Suntech, the stock is down 83%.
Something just doesn't seem right here. Over 5.2 gigawatts (GW) of new solar capacity were installed last year--a record that crushes the 2.2 GW installed in 2007. But despite the 136% year-over-year capacity growth, shaky policy and deteriorating finance conditions have given investors cold feet, driving down stock prices as you can clearly see.
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So what's going on here? Has Wall Street rightfully rowed its solar boat ashore, or has their short-sightedness left solar shares ripe for the picking?
Solar Stocks: Wall Street Loves to Hate 'Em
Consider this: Hours before SunPower reported its earnings last week, Barron's ran an article giving credit to Hapoalim Securities analyst Gordon Johnson's initiation of coverage of the stock with a $15 price target and a 'Sell' rating.
What happened?
SunPower's earnings came out an hour later. They reported record fourth quarter and year-end revenue and profit. For the full year 2008, the company's profit grew 891% per share, to a total $92.3 million.
The stock climbed 21% overnight and into the next trading day, and Gordon Johnson could probably taste the foot in his mouth.
This seems to be a theme with 'mainstream' market analysts. They rely too much on the here and now, rigidly fastened to the numbers of the day, without regard for a rapidly changing energy and political picture.
It doesn't matter to them that that cumulative installed solar capacity is forecast to grow 374% between now and 2015. It doesn't matter to them that an Obama and Chu-led energy administration will mandate renewable portfolio standards (RPS) with a solar requirement while providing long-term guidance for tax incentives and credits. It doesn't matter to them that capping U.S. emissions, which will happen in the next two years, will make carbon a liability and give it price, making renewables all the more sought after and competitive.
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