Thursday, April 30, 2009

Solar Stock: Recovery and Comparative Market Performance

Consecutive weeks of gains on the major indexes suggest the market is showing signs of recovery, however as predicted by The Green Market, solar has had a bumpy ride. At the beginning of 2009, The Green Market published its Solar Stock Picks, these five solar companies were selected based on their ability to weather the impending decline in demand, manage smaller margins and deal with financing difficulties.

FIRST SOLAR INC. FSLR
SUNPOWER CORP. SPWRA
Suntech Power Holdings Co., Ltd. STP
EVERGREEN SOLAR INC. ESLR
CANADIAN SOLAR INC. CSIQ

Late last year The Green Market asked investors to consider the Green stock buying opportunity. Through a combination of timing the market and short side profits, The Green Market illustrated that investing in solar can be a lucrative proposition. In January of this year, prior to President Obama's inauguration, The Green Market reviewed ways for investors to time the Obama effect.

On March 7, The Green Market outlined some of the variables that are driving the value of solar stocks. Over the course of March and April there was extraordinary growth in all the major indexes, yet early in the rally The Green Market noted that between March 9-17 The Green Market's solar stock was under-performing the market at crucial pivot points.

For the week ending on March 7 all The Green Market's solar stock was down led by SPWRA at 16 percent, only FSLR managed a 2 percent gain. On March 12 The Green Market highlighted ongoing volatility of the solar industry by comparing solar stocks to the leading indicators. DJIA, S&P and the NASDAQ were all up and except for Canadian Solar (CSIQ), the Green Market's solar stock was down across the board.

For the week ending on March 14, financials led stocks to the best week since November 2008 and all the Green Market Stock picks were up significantly led by ESLR's 37 percent. However while other solar players were making double digit advances, industry leader SunPower posted modest advances of only 4 percent.

For the week ending March 21, ESLR declined 3 percent while FSLR and SPWRA all lost between over 7. STP advanced less than one half of a percent and CSIQ posted gains of 20 percent. The last week of March saw the best gains of 2009 with Wall Street closing out its first two-week gain in almost a year. All The Green Market's solar stock picks were up with ESLR and STP up over 60 percent. During the week ending on April 4, ESLR, FSLR and SPWRA all declined while CSIQ and STP posted respectable gains of 16 and 20 percent respectively.

The week ending April 11 was exceptional, on Thursday March 9 stocks surged to their highest levels in two months. The same day, The Green Market reviewed the importance of international cooperation in anticipation of recovery. The period between March 9 and April 9 2009 proved to be an extraordinary month for the stock market. The S&P 500 rose 26.6 percent and if this March-April advance were a calendar month, it would be the best month for the S&P 500 since 1933. Despite these momentous gains, all the Green Market's solar stocks were up only marginally with FSLR leading with gains of 5.71 percent.

On the week ending April 18, Wall Street kept its six-week rally alive FSLR, SPWRA and STP posted one to two percent gains while ESLR and CSIQ declined 2 and 6 percent respectively. The week ending April 25, the DJIA capped off the week with a gain of 119.23 points. Yet during this period all The Green Market's solar stock was down except for FSLR, which had gained a modest 2.55% for the week. SPWRA and CSIQ were both down over 10%.

On April 29, 2009, President Barack Obama's 100th day in office, the GDP report, a rebound in consumer spending, and a decline in business inventories all provided signs that the economic slide has slowed. The Fed reiterated what Wall Street has already realized: The recession is starting to ease and the economy is stabilizing,

By the end of the day the major indexes had already been up sharply, posting gains of more than 2 percent. The Dow Jones industrial average jumped 169 points to its highest close since Feb. 9. The Standard & Poor's 500 rose to its highest trading level since late January. The Nasdaq composite index posted its highest finish since November 4, and the Green Market's Solar stocks were up between 3 percent (FSLR) and 16 percent (STP).

There are two noteworthy conclusions that can be drawn from this Green Market solar stock review. As anticipated by The Green Market on March 4, 2009, in the solar sector, cost is trumping efficiency. First Solar's lower priced thin film solar technology has marginally outperformed Sunpower's more efficient solar panel. Between the period of March 18 and April 24, FSLR posted gains of 19 percent while SPWRA posted gains of 14 percent.

Even more noteworthy than the comparative performance of FSLR and SPWRA, is the fact that the two of the largest and best performing players in the US solar industry are being bettered by other solar firms even though each is the leader in either cost or efficiency. Between March 18 and April 24 of this year, FSLR and SPWRA posted gains under 20 percent while CSIQ, ESLR and STP posted gains of over 30 percent.

As of the end of trading on Wednesday April 29, most of The Green Market's solar stocks are down for the year. Two are up for the year, they include STP at 21.71 and FSLR at 9.93 percent. CSIQ is down 5.88 for the year, ESLR is down 31.35 percent. Most notably SPWRA is down 32.3 percent for the year. To put this in perspective the Nasdaq composite index is up over 8.6 percent for the year.

However, since the Green Market's last solar stock report on March 17 we have seen overall gains. Between March 18 and April 24 all the major indexes and all The Green Market's solar stock is up.

NASDAQ 1491.22 - 1694.29 up 11.98%
S&P 794.35 - 866.23 up 8.29%
DJIA 7486.58 - 8076.39 up 7.30%

*The three indexes are up an average of 9.19%

STP 7.03 -13.16 up 46.58%
ESLR 1.37 -2.16 up 36.57%
CSIQ 4.09 - 5.89 up 30.96%
FSLR 118.64 - 147.46 up 19.54%
SPWRA 21.65 - 25.41 up 14.79%

*The Green Market's solar stock are up an average of 29.68%

Although the recession is impacting everyone including large well financed solar companies, The Green Market solar stock average was 3 times better than the average of the major indexes. To put it another way between March 18 and April 24, The Green Market solar stock average is outperforming the average of the major indexes by more than 20 percent.

Despite the recession, the credit crunch and other hurdles, The Green Market's solar stocks are posting significant gains.

Next: SunPower News: Share Offering and Convertible Debentures

1 comment:

Mike said...

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