Sun sets on solar? SPWRA, FSLR, DSTI, ENER in double-digit tailspin
Today's Financial News - Posted March 17, 2009
SunPower Corporation (SPWRA), down -10%, First Solar, Inc. (FSLR) down over -10%, DayStar Technologies Inc. (DSTI), down -23%, and Energy Conversion Devices Inc. (ENER) down almost -25% today. Looking for hope and change where the sun don’t shine…
by J. Christoph Amberger
Baltimore—TFN: Solar stocks joined in a veritable race to the bottom today:
SunPower Corporation (NASDAQ: SPWRA) lost over 10% of its valuation today after Morgan Stanley downgraded the solar producer to Underweight yesterday…
First Solar, Inc. (NASDAQ:FSLR) was downgraded by Barclays, from Overweight to Equal Weight, and lost over 10% of its valuation.
DayStar Technologies Inc. (NASDAQ:DSTI), a developer of solar cell technology,reported a net loss of $7.8 million, or 23 cents a share, for Q4 of 2008. That was better than a net loss of $8 million, or 29 cents a share, in the previous year. The stock fell below $1.10, by almost 23% today.
And Energy Conversion Devices Inc. (NASDAQ: ENER) reduced its previous guidance for 2009 revenues. It cost shareholders almost 25% of their valuations.
So what is going on here? In this political climate, where promises of miracle cures in alternative energy and healthcare have become matters of policy, solar stocks should be at or near record highs. But despite Washington hype, most solar-related stocks have lost 30%, 50%, even 70% since last year, when oil prices were approaching $140 a barrel.
Not for lack of financial editors and punters trying to stir the pot, mind you: Much like Hard-Money gurus praying for the dollar to please disintegrate, the alternative energy experts dabbling in wave energy, algae, and exotic kukui nut crops a year ago are organizing rain dances to get that Peak Oil Theory pushing prices past $100 a barrel again.
(Im not making up kukui nuts…)
The main problem with a wholesale switch to solar energy is that it requires the buy-in of private businesses and households. Buying—even buying into granola energy concepts—requires cash. And there’s little indication that upside-down mortgage owners and customer-starved businesses will be investing in a clean green conscience any time soon.
Never mind the tax incentives.
Can government subsidies make up for the shortfall?
Possibly. I anticipate a series of government contracts to cause price and volume spikes in select solar-related stocks. (After all, billions of stimulus dollars have to be burned by law!)
Short of a consumption-driven demand hike for oil, however, I’m not counting on a sector-wide recovery any time soon.
*** Meanwhile, TFN’s options guru Andrew Snyder is about to pick this week’s options play on the insurance industry. He’s being secretive on the direction he’s taking… Is he going short? Or does he think there’s some upside left in the short-lived market rally? I’d like to update you on his assessments in our free e-letter, the TFNeNews. Simply use the box below to sign up with your email address!
Next Article: Strategic Options Update: Buy the April puts of this insurance and consulting conglomerate
2 Responses to “Sun sets on solar? SPWRA, FSLR, DSTI, ENER in double-digit tailspin”
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March 18th, 2009 at 10:45 am
Solar does not compete with oil, it competes with gas, coal and nuclear. Historically, there has been some correlation between oil prices and gas prices, less so with coal prices, and obviously none with nuclear. Does that alter your analysis?
March 19th, 2009 at 1:13 pm
A little much hyperbole–illustrating all the problems with so-called financial “journalism.” Solar power is set to do very well for a long time to come, and yet this nonsense gets published. Think of real investors, not the idiotic day traders who have ruined the stock market.