Market Overview

First Solar, SunEdison See Surge In Short Interest (AEIS, FSLR, SUNE)

Among U.S. solar-related stocks, Advanced Energy Industries (NASDAQ: AEIS), First Solar (NASDAQ: FSLR) and SunEdison (NYSE: SUNE) saw significant swings in short interest in the most recent period.

Real Goods Solar (NASDAQ: RSOL) and SunPower Holdings (NASDAQ: SPWR) saw short interest in their shares grow somewhat between the July 31 and August 15 settlement dates.

However, the number of shares sold short in GT Advanced Technologies (NASDAQ: GTAT) and SolarCity (NASDAQ: SCTY) decreased in the first weeks of August.

Furthermore, the number of U.S.-listed shares (or ADRs) sold short of foreign-based companies Canadian Solar (NASDAQ: CSIQ), China Sunergy (NASDAQ: CSUN), JA Solar Holdings (NASDAQ: JASO), LDK Solar (NYSE: LDK) and Yingli Green Energy (NYSE: YGE) grew in the period.

But short interest in ReneSola (NYSE: SOL), Suntech Power Holdings (NYSE: STP) and Trina Solar (NYSE: TSL) shrank.

Here is a quick look at how Advanced Energy Industries, First Solar and SunEdison have fared and what analysts expect from them.

Advanced Energy Industries

This maker of power conversion products saw short interest fall more than 18 percent in the period to around 1.04 million shares. That was the smallest number of shares sold short since the end of March. Short interest was about three percent of the float, and days to cover was about three.

At the end of July, the company reported better-than-expected earnings and guided EPS above the consensus estimates. Its market capitalization is more than $720 million. The price-to-earnings (P/E) ratio is higher than the industry average, but the long-term earnings per share (EPS) growth forecast is more than 31 percent.

Only two of the seven analysts who follow the stock and were surveyed by Thomson/First Call recommend buying shares, and two rate the stock at Underperform. But their mean price target, which is where the analysts expect the share price to go, suggests there is more than 14 percent potential upside.

The share price has fallen more than 11 percent over the past month, though it is still up more than 31 percent year-to-date. The stock has outperformed competitor MKS Instruments (NASDAQ: MKSI), as well as the Nasdaq and the S&P 500, over the past six months.

First Solar

Short interest in this solar energy company grew about 21 percent to around 11.24 million shares during the period, essentially erasing a similar decline in the previous period. The number of shares sold short represents more than 16 percent of the float. Days to cover slipped to less than two.

This Tempe, Arizona-based company missed consensus EPS estimates in the most recent quarter. First Solar has a market cap of more than $3 billion. It offers no dividend. The P/E ratio is lower than the industry average, and the operating margin is greater than the industry average.

The consensus recommendation of the analysts surveyed is to hold First Solar shares, and it has been for at least three months. The current share price is higher than their mean price target, meaning the analysts see no upside potential at this time.

The share price is more than 18 percent lower than a month ago, but still up more than 31 percent from the beginning of the year. The stock has outperformed the likes of Linear Technology (NASDAQ: LLTC) and Sharp, as well as the broader markets, over the past six months.

See also: First Solar Reports Sale of Canadian Power Plants to GE-Alterra Partnership

SunEdison

The number of shares sold short in the former MEMC Electronic Materials rose about 46 percent in the period to more than 16.92 million, or more than seven percent of the float. That was the highest level of short interest since mid-June. Days to cover declined to about two by mid-August.

One of the world's largest solar installers and developers, SunEdison posted a wider than expected net loss during the period but topped revenue estimates. It has a market cap of less than $2 billion. While it has a long-term EPS growth forecast of about 15 percent, its return on equity is in the red.

Eight of 15 analysts surveyed recommend buying shares, with two of them rating the stock at Strong Buy. Their mean price target indicates they see more than 27 percent potential upside, though it is largely due to a recent drop in the share price.

The share price fell more than 23 percent earlier this month but remains more than 130 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 broader markets.

See also: Short Interest In Celgene, Onyx Continues To Shrink

At the time of this writing, the author had no position in the mentioned equities.

Posted-In: Advanced Energy Industries analog devices canadian solar China Sun Energy First Solar GT Advanced Technologies JA Solar Holdings ldk solar linear technology MEMC Electronic Materials MKS Instruments Real Goods Solar ReneSola SolarCity SunEdison SunPower Holdings Suntech Power Holdings Trina Solar yingli green energyShort Ideas Trading Ideas Best of Benzinga

 

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