Sunshine in Solar Stocks

Oil prices and solar stocks price correlation seems to be main excuse for the recent rally in solar stocks.
The truth is that the whole market has been rallying, so pick your reason for the recent solar rally...

Seen in 247wallst.com :

Suntech Power Holdings Co., Ltd. (NYSE:STP) closed its follow-on offering of 23 million ADSs on May 28th. The price per ADS was $12.50, and the company raised net proceeds of about $277 million.

Suntech shares hit a high of more than $16/ADS yesterday before closing at $15.44, nearly $3 more than the follow-on offering price. And virtually all solar stocks have risen nicely in the past week. Canadian Solar Inc. (NASDAQ:CSIQ) and Yingli Green Energy Holding Company Ltd. (NYSE:YGE) are up nearly 20%, and Suntech and Energy Conversion Devices Inc. (NASDAQ:ENER) are up more than 5%.

Why the run-up in price since May 22nd? After all, Suntech earned just $0.01/ADS in the first quarter on revenue of $315.7 million, and estimates for the current quarter are for EPS of $0.01 on $360.5 million in revenues. The others certainly weren’t much more impressive. All the solar players just managed to clear very low expectations. So what’s up?

The answer lies in the rise in oil prices. Crude prices have risen above $64/barrel, US Oil Fund ETF (NYSE:USO) is up more than 5%, and solar stocks are following along for the ride. The sentiment seems to be that demand for oil will translate into demand for energy from all sources.

The solarstocks ETF: Claymore/MAC Global Solar Index is having some difficulty passing the $10 mark, but today should be a good candidate for a breakout in this ETF's price:


Biggest mover today is Canadian Solar Inc. (CSIQ) up 9%

Labels: Canadian Solar Inc., Claymore, CSIQ, ETF, Global Solar Index, MAC, solar ETF, solarstocks, sunshine, TAN

posted by Ertai at 10:39 AM