Also, interesting to note is that First Solar is now the only Solar stock that has a positive gain in 2008. Sunpower (SPWR) and Suntech Power are still about 30% and 40% down in 2008 respectively.

Suntech Power (STP) has gone from about 30 to 50 in the last two weeks with Sunpower (SPWR) going from 60 to 90 in the same time frame. So do they get back to 2007 highs?

I mentioned in my article last week that I missed an opportunity to buy Suntech Power (STP) in the low 30’s but now I even missed the opportunity to buy in the low 40’s.

I think this is the case of ‘a rising tide lifts all boats’. There are solar stocks out there that had no business going up but benefited by the overall solar rally. So what I am planning on doing now is to look at second-tier solar stocks that could be shorted (via PUTS) while staying away from from FSLR, STP and SPWR until I see an opportunity to go long.

What do you all think?

Solar Stocks Weekly and YTD Price Change - Week ending April 04, 2008: 

* No holdings in any of the above mentioned stocks.

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The biggies, First Solar (FSLR), Suntech Power (STP) and Sunpower (SPWR), all made impressive comebacks. I am kicking myself for not buying Suntech Power (STP) when it was in the 30’s. I was closely watching it and was hoping to enter Suntech in the high 20’s. Well, before I knew it Suntech goes from 30 to 40 in a week.

The question is have the Solar Stocks turned a corner here? I don’t have the answer. Do you? Do you see this as an opportunity for a short-term Short or are you planning to go Long.

* No holdings in any of the above mentioned stocks

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Crude Oil and Solar Stocks are moving in the opposite direction with predictions that oil will continue to move higher.

The inability of congress to extend the renewable energy tax breaks beyond 2008 is also creating uncertainty even though most solar cell makers depend on European countries for majority of their revenues.

At some point you have to look at some of the quality solar companies.

I personally only consider four solar stocks worth investing (you can trade in other solar stocks) at this point:

• Suntech Power (STP)
• Sunpower Corp. (SPWR)
• First Solar (FSLR)
• MEMC Electronics (WFR)

All of these are quality companies and leaders in different categories:

• Suntech Power (STP)- Biggest Solar company in China and one of the biggest pure play solar companies in the world. Suntech also has pretty considerable R&D and is not just a low cost Chinese solar cell producer.
• Sunpower Corp (SPWR) - This silicon valley based company is a leader in solar cell efficiency.
• First Solar (FSLR) - The leader in cost and doesn’t use polysilicon which continues to remain in short supply.
• MEMC Electronics (WFR) - As long as polysilicon supply remains tight MEMC electronics will benefit.

One thing that remains certain is that solar stocks will continue to remain volatile. These stocks could go either up or down 20% a month from now. But unlike Corn Ethanol, Solar Cells are here to stay and the technology continues to advance.

I have made my fair share of mistakes in the past when it comes to Solar investing. I am currently trying to see if I can pick a bottom in Suntech Power and SunPower.

Full Disclosure: No position in any of the above listed stocks.

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Some of the signatories on the letter included employees from Google, Applied materials, Fuel Cell Energy, GE Energy, Evergreen Solar, Kyocera Solar, Sharp Solar, SunPower.

Read the letter here on ACORE’s website.

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The market initially reacted positively with Kaydon gaining as much as 8% but the stock gave up all of its gains and closed the day in red.  The stock is basically sitting at where it was before the earnings report on Thursday.  I am looking at this week to see how the stock reacts in the short term. Kaydon has been severely punished since the the start of the year with the overall market and in particular the alternative energy sector.

The long term story continues to develop nicely for Kaydon and it remains a compelling long term opportunity.

The near term downside remains if the Renewable Energy tax credits are not extended by Congress beyond the year 2008. However, the wind energy demand and record backlog has the company sitting pretty despite what happens with the current law.

Nevertheless, the alternative energy sector could use a boost by congress with the extension of tax credits beyond 2008.

Both Friedman,Billings,Ramsey &Co and Robert W. Baird came out with ‘Outperform’ ratings on Friday.  Deutsche Securities already has a ‘Buy’ rating on the stock from January.  The price targets range from $57 to $58.

S&P meanwhile has a ‘Sell’ rating and $40 price target.

I continue to remain bullish on the wind sector.  Unites States is now the second largest wind market in the world after Germany.  A recent article from NYT continues to paint a bright picture for the wind sector.

If you are optimistic about the overall market then you should put Kaydon on your watchlist.

Full Disclosure: I am long Kaydon.

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Crude Oil appreciating 78% only helped the cause for these companies in 2007.

I think its fair to say 2007 was a Solar Year on Wallstreet.

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Solarfun (SOLF), LDK Solar (LDK), Canadian Solar (CSIQ), Hoku (HOKU) and China Sunergy all gained over 30% last week. 

Solar Stocks Weekly and YTD Price Change - Week ending December 07, 2007:

Disclosure: Long STP and WFR

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Solar Stocks Weekly and YTD Price Change - Week ending November 30, 2007:

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Kevin Rudd is considered a lot more environment friendly compared to John Howard. His Labor government has set a 20% renewable energy target by the year 2020 and he is also a supporter of the Kyoto protocol.

Although, a number of companies in the Alternative Energy sector will benefit from this I believe Suntech Power (STP) might benefit the most.

Here’s a little background about Suntech Power founder Dr. Zhengrong Shi:

Prior to founding Suntech in 2001, he was a research director and executive director of Pacific Solar Pty., Ltd., an Australian PV company engaged in the commercialization of next-generation thin film technology, from 1995 to 2001. From 1992 to 1995, he was a senior research scientist and the leader of the Thin Film Solar Cells Research Group in the Centre of Excellence for Photovoltaic Engineering at the University of New South Wales in Australia, the only government-sponsored PV industry research center in Australia.

• Suntech Power already has a presence in Australia and even does collaborative research with University of New South Wales. The company even donated $1.5 million towards solar and renewable energy research at the University of New South Wales
• Excerpt from Q3 2007 Conference call (via SeekingAlpha)
  Pavel Molchanov - Raymond JamesA question from Dr. Shi; Dr. Shi, you stated in the media a few months ago that if the Australian creates renewable energy incentives, you would consider creating manufacturing capacity in Australia itself. A, do you believe that is a likely scenario? And two, would you actually considering developing manufacturing capacity outside of China, either in Australia or elsewhere?

  Dr. Zhengrong Shi

  Well, we feel confident that the Australian Government, either the existing government or the opposition party, they both have announced a new regulation to promote solar, so Suntech actually is in the process to form an Australian team. That’s one part, and we believe that when the demand volume reaches a certain mass, we do consider to form a manufacturing capability in Australia.

  And also in other parts of the world when we reach a multi-gigawatts and we have to open our production line or a factory close to the market. That’s our general thinking.

We will have to see if and when the new government starts to deliver on there promises of Renewable Energy but Suntech Power’s strong Australian connections gives them an edge in Australia.

Disclosure: I am long SunTech Power

Image Credit: Sydney Morning Herald

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Solar Stocks Weekly and YTD Price Change - Week ending November 23, 2007:

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