Short Sellers Pile On Real Goods Solar (FSLR, RSOL, SUNE)
GT Advanced Technologies (NASDAQ: GTAT) saw short interest in its shares grow somewhat between the July 15 and July 31 settlement dates.
Furthermore, the number of U.S.-listed shares (or ADRs) sold short of foreign-based companies JA Solar Holdings (NASDAQ: JASO), LDK Solar (NYSE: LDK) and Suntech Power Holdings (NYSE: STP) grew in the period.
Here is a quick look at how First Solar, Real Goods and SunEdison have fared and what analysts expect from them.
Short interest in this solar energy company declined more than 17 percent to around 9.28 million shares during the period. That was the smallest number of shares sold short in at least a year, but it still represents more than 13 percent of the float. Days to cover remained at more than two.
In late July, this Tempe, Arizona-based company announced projects in New Mexico and Australia. First Solar has a market capitalization of about $4 billion. It offers no dividend. The price-to-earnings (P/E) ratio is lower than the industry average, and the operating margin is higher than the industry average.
The consensus recommendation of analysts surveyed by Thomson/First Call is to hold First Solar shares, and it has been for at least three months. The current share price is above their mean price target, meaning analysts see no upside potential at this time.
The share price is more than 21 percent higher than six months ago, even after pulling back more than 14 percent in the past week. The stock has outperformed the likes of Linear Technology (NASDAQ: LLTC) and Sharp, as well as the broader markets, over the past six months.
Real Goods Solar
The short interest in this solar installation services provider rose more than 25 percent to around 3.27 million shares by the end of July. The number of shares sold short has increased in the past five consecutive periods and now represents about 24 percent of the company's total float.
Real Goods Solar recently announced the acquisition of Mercury Solar Systems. The Louisville, Colorado-based company now has a market cap of near $60 million. Note that its return on equity and operating margin are both in negative territory.
Though the consensus recommendation previously had been to hold shares, no analysts have been surveyed by Thomson/First Call recently. That means there is no current mean price target. Given the stock's volatility so far this year, a consensus price target might mean little anyway.
The share price spiked more than 247 percent to a multiyear high in mid-May, but it quickly retreated. Shares have traded mostly between $2 and $3 since then. Over the past six months, the stock has underperformed competitor SolarCity but outperformed the Nasdaq and the S&P 500.
The number of shares sold short in the former MEMC Electronic Materials declined about 15 percent in the period to more than 11.58 million, or about five percent of the float. The streak of falling short interest stretches back four periods. Days to cover was about three at the end of July.
Headquartered near St. Louis, SunEdison is one of the world's largest solar installers and developers, and it has a market cap of less than $2 billion. It also remains one of the world's biggest semiconductor wafer suppliers. While it has a long-term EPS growth forecast of about 15 percent, its return on equity is in the red.
Nine of 17 analysts surveyed recommend buying shares, with three of them rating the stock at Strong Buy. Their mean price target indicates they see more than 13 percent potential upside, though it is due to the recent drop in the share price.
The share price dropped more than 23 percent last week but remains more than 114 higher year-to-date. Over the past six months, the stock still has outperformed the likes of Advanced Energy Industries and Analog Devices (NASDAQ: ADI), as well as the Dow Jones Industrial Average.
At the time of this writing, the author had no position in the mentioned equities.
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