Solar Stocks at Historic Lows: Time to Buy? $STP $JKS $LDK 0

Why does a firm like Suntech with annual revenue of $3.2 billion have a market cap of $306.25 million?

Why has First Solar’s market cap dropped to $5 billion from more than $10 billion just months ago? First Solar’s stock, trading at $57.90 and down 8.4 percent has not seen its stock price that low since April 2007.

Yesterday, Oct 3, Suntech’s stock dropped 26.41 percent to $1.70, an historic low. What is the market reacting to?

Suntech is the world’s largest producer of solar panels. As of last quarter’s earnings report the China-based firm was on track to meet its full year guidance of 2.2 gigawatts. Total net revenues were $830.7 million in the second quarter of 2011. Revenue guidance for full year 2011 was dialed down $100 million to $3.2 billion to $3.4 billion. Gross margins were a slim 4.1 percent in the second quarter of 2011. The firm’s ASP declined 7 percent quarter-to-quarter and Suntech expects mid- to high-teen price declines in Q3.

But Suntech actually got some positive news this month. Sempra Generation’s massive 700-megawatt Mesquite Solar project has Suntech as the panel supplier for the initial 200-megawatt (DC) phase of the build and the project just received a DOE loan guarantee. When completed in 2013, Mesquite Solar I will be one of the largest photovoltaic solar installations in North America.

First Solar also saw billions in loan guarantees come through in several large solar projects.

Continue Reading at Greentech Media

Previous ArticleNext Article

Leave a Reply

Your email address will not be published. Required fields are marked *