Market Overview

First Solar, SolarCity Face Rising Short Interest (FSLR, RSOL, SCTY)

Among U.S. solar-related stocks, First Solar (NASDAQ: FSLR), Real Goods Solar (NASDAQ: RSOL) and SolarCity (NASDAQ: SCTY) saw the most significant swings in short interest in early October.

The number of shares sold short in Advanced Energy Industries (NASDAQ: AEIS) and GT Advanced Technologies (NASDAQ: GTAT) decreased modestly between the September 30 and October 15 settlement dates.

Meanwhile, SunEdison (NYSE: SUNE) and SunPower Holdings (NASDAQ: SPWR) saw their short interest grow somewhat.

Furthermore, the number of U.S.-listed shares (or ADRs) sold short of foreign-based companies LDK Solar (NYSE: LDK), ReneSola (NYSE: SOL), Suntech Power Holdings (NYSE: STP) and Yingli Green Energy (NYSE: YGE) also grew.

Short interest in China Sunergy (NASDAQ: CSUN) was more than 260 percent higher than in the previous period.

But short interest in Canadian Solar (NASDAQ: CSIQ), JA Solar Holdings (NASDAQ: JASO) and Trina Solar (NYSE: TSL) shrank in the period.

See also: Four Top-Performing Clean Energy ETFs Under $15

Here is a quick look at how First Solar, Real Goods Solar and SolarCity have fared and what analysts expect from them.

First Solar

Short interest in this Tempe, Arizona-based company grew about 10 percent to around 11.90 million shares during the period, the second period in a row of rising short interest. The number of shares sold short represented about 17 percent of the float. Days to cover slipped but remained more than two.

In October, this solar energy company announced that it would sell a production facility in Mesa, Arizona. First Solar has a market cap of less than $5 billion. It offers no dividend. The price-to-earnings (P/E) ratio is higher than the industry average, and the operating margin is lower than the industry average.

The consensus recommendation of the 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 higher than the analysts' mean price target, meaning they see no upside potential at this time.

The share price is more than 34 percent higher than a month ago, as well as up more than 69 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.

Real Goods Solar

From a year-to-date peak in the previous period, the short interest in this solar installation services provider retreated more than 12 percent to more than 3.84 million shares. That was more than 21 percent of the float. Note that the number of shares held short was fewer than 2,000 a year ago.

Shares of this Colorado-based solar energy company have been trading at higher than average volume, at levels not seen since the stock spiked to a 52-week high back in May. The company has a market cap near $120 million. Its operating margin and return on investment are both in negative territory.

No analysts surveyed by Thomson/First Call follow this stock any longer, so at this time there is no consensus recommendation, mean price target or implied upside.

The share price has risen about 84 percent in the past month and is up more than 391 percent since the beginning of the year. Over the past six months, the stock has underperformed competitor SolarCity, though it has outperformed the Nasdaq and the S&P 500 in that time.

SolarCity

Short interest in this provider of solar energy systems to residential and commercial customers grew about seven percent to nearly 7.33 million shares. The number of shares sold short was more than 30 percent of the total float, and the highest since SolarCity began trading publicly in mid-December.

This San Mateo, California-based company acquired Zep Solar during the period. SolarCity has a market cap of more than $4 billion, but it does not offer a dividend. The long-term earnings per share (EPS) growth forecast is about 33 percent, but the return on equity is in the red.

Only one of the seven polled analysts recommends buying shares. The consensus recommendation has been to hold shares for the past three months. Here too the share price has outpaced the analysts' mean price target. Unless individual targets are raised, upside potential is not indicated.

Shares have pulled back about seven percent from recent post-IPO high, and the share price is up more than 390 percent since the beginning of the year. Over the past three months, the stock has outperformed not only the Nasdaq and the S&P 500, but also competitor Renesola.

See also: Short Interest Still Rising In Solar City, Falling In Advanced Energy

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

Follow us on Twitter.

Posted-In: Advanced Energy Industries applied materials canadian solar China Sun Energy First Solar GT Advanced TechnologiesShort Ideas Trading Ideas Best of Benzinga

 

Related Articles (AEIS + CSIQ)

Around the Web, We're Loving...

Partner Network

Get Benzinga's Newsletters