Short Sellers Retreat From Advanced Energy Industries, Inc., First Solar, Inc. & GT Advanced Technologies Inc
Short interest among the leading U.S. solar-related stocks shrank in the final two weeks of August. Advanced Energy Industries (NASDAQ: AEIS), First Solar (NASDAQ: FSLR) and GT Advanced Technologies (NASDAQ: GTAT) saw the largest downswings in the number of their shares sold short.
Short sellers also retreated from RGS Energy, SolarCity, SunEdison and SunPower more modestly between the August 15 and August 29 settlement dates.
Furthermore, the number of U.S.-listed shares (or ADSs) sold short of foreign-based companies Canadian Solar, China Sunergy, Hanwha SolarOne, JA Solar Holdings and ReneSola also shrank in the period, but short interest in JinkoSolar, Trina Solar and Yingli Green Energy swelled.
Here is a quick look at how Advanced Energy Industries, First Solar and GT Advanced Technologies have fared and what analysts expect from them.
Advanced Energy Industries
After two periods of short interest above two million shares, this maker of power conversion products saw short interest shrink to about 1.92 million during the period. That was around 5 percent of the total float. It would now take more than six days to cover all short positions, a year-to-date high.
Shares reached a new 52-week low in early August as they struggle to recover from news of the chief executive's retirement. The Colorado-based company has a market capitalization near $750 million. Its price-to-earnings (P/E) ratio is greater than the industry average, but so is its operating margin.
Only three of the nine analysts who follow the stock and were surveyed by Thomson First Call recommend buying shares, but all three rate it at Strong Buy. Their mean price target, or where the analysts expect the share price to go, suggests there is about 14 percent potential upside.
The share price ended the two-week short interest period around 4 percent higher. As of Wednesday's close, it is down around 17 percent year to date and below the 50-day moving average. The stock has underperformed the broader markets over the past six months.
Short interest in this Tempe, Arizona-based company fell more than 13 percent to land on about 8.92 million shares on August 29. That was the lowest number of shares sold short this summer, and it represents more than 12 percent of the float. The days to cover rose to more than six.
The largest U.S. solar panel maker is developing about 250 megawatts of solar projects in Japan. It has a market capitalization of near $7 billion. Note that the price-to-earnings (P/E) ratio is less 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, though it has more buy recommendations now than a month ago. Note that the mean price target is less than current share price, indicating that analysts see no upside potential at this time.
Short sellers watched shares rise and retreat about 3 percent during the two-week period, and shares now are up more than 23 percent year to date. The stock has outperformed not only the likes of Linear Technology and Sharp over the past six months, but the Nasdaq and the S&P 500 as well.
GT Advanced Technologies
This Nashua, New Hampshire-based company saw short interest dwindle about 9 percent in the latter weeks of the month to almost 51.50 million shares, or almost 38 percent of the float. The number of shares short in the previous period was a year-to-date high. Days to cover remained at more than six.
The company was expected to be a supplier for the iPhone 6, though now it looks like that may not be the case. GT Advanced Technologies has a market cap of less than $2 billion. While the long-term earnings per share (EPS) growth forecast is more than 40 percent, the return on equity is in the red.
Of the 12 analysts surveyed, seven of them recommend buying shares, but that is fewer Buy ratings than two months ago. The mean price target suggests plenty of potential upside, though the recent sell-off may get some of the credit for that. That consensus target is less than the 52-week high as well.
Shares gained less than three percent during the two-week period but plunged after Apple's iPhone launch. The share price is still up more than 40 percent year-to-date. The stock has underperformed larger competitor Applied Materials and the broader markets over the past six months.
At the time of this writing, the author had no position in the mentioned equities.
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