First Solar, SunEdison Buck Trend In Solar Short Interest

First Solar, Inc. FSLR and Sunedison Inc SUNE bucked the short interest trend among the leading U.S. solar-related stocks between the December 31 and January 15 settlement dates. Real Goods Solar, Inc. RGSE, on the other hand, led that trend as the new year kicked off. Below is a quick look at how these three stocks have fared recently and what analysts expect from them. That is followed by a glance at short interest in other leading solar stocks. See also: Do Lower Oil Prices Really Impact The Solar Power Industry?

First Solar

Short interest in this Tempe, Arizona-based company surged almost 10 percent from the 52-week low in the previous period to around 8.77 million shares. That represents about 12 percent of the float. At the current average daily volume, it would take more than three days to cover all short positions. Solar stocks have been affected by the plunge in oil prices, just like other energy stocks. The company has a market capitalization of more than $4 billion. Its operating margin is better than the industry average and its price-to-earnings (P/E) ratio is less than the industry average. The consensus recommendation of the analysts polled by Thomson/First Call is to hold shares, and that has been the case for at least three months. Yet, the analysts' mean price target, or where they expect the share price to go, is more than 27 percent higher than the current share price. Shares traded higher than that as recently as October. The share price retreated about 10 percent during the short interest period, but since then it has recovered more than 6 percent. Although the stock underperformed Linear Technology and the broader markets over the past six months, it also narrowly outperformed Sharp in that time.

Real Goods Solar

Short interest in this company now known as RGS Energy fell more than 8 percent to more than 4.02 million shares during the period. The number of shares short has declined in every period since the end of June, but the most recent figure still represents more than 9 percent of the float, and the days to cover is more than 19. Shares of this Colorado-based solar energy company have declined since last March and now trade for less than a dollar. It has a market cap of only about $25 million. Its operating margin and its return on equity both remain in negative territory, but double-digit percentage revenue growth is forecast for the current quarter. Only two analysts were surveyed, one rating the stock at Strong Buy and the other recommending holding the shares. A move to the mean price target would represent a gain of more than 74 percent for the shares. But that consensus target is well south of the 52-week high from last March. Despite rising about 2 percent during the short interest period, shares fell to a new 52-week low this week. They have been below the 50-day moving average since last summer. Over the past six months, the stock has underperformed the other two stocks featured here, as well as the S&P 500.

SunEdison

After rising in seven of the past eight periods, the number of shares sold short reached more than 80.96 million in mid-January. That is around 30 percent of the float, as well as the highest level of short interest in the past year. The days to cover dropped from more than nine to about seven. One of the world's largest solar installers and developers, SunEdison announced a $4 billion deal to build a solar factory in India during the period. The company has a market cap of around $5 billion. Here too, the operating margin and the return on equity are in the red. All but one of the 12 analysts surveyed recommend buying shares, with four of them rating the stock at Strong Buy. Their mean price target indicates they see more than 32 percent potential upside. Note that the shares have not traded at that level since back in 2008. The share price ended the period more than 2 percent lower, and it has pulled back a bit more since. The stock is down about 3 percent year to date. Over the past six months, it underperformed the likes of Advanced Energy Industries and Analog Devices, as well as the broader markets. See also: New Data: Short Sellers Continue To Bet Against Alibaba

And Others

Short sellers also retreated from Advanced Energy Industries, SolarCity and SunPower in early January, while Vivint Solar saw little change in the number of shares short between the beginning and end of the two-week period. Furthermore, the trend continued in foreign-based solar companies, with the number of U.S.-listed shares (or ADSs) sold short of Canadian Solar, China Sunergy, Hanwha SolarOne, JinkoSolar, ReneSola, Trina Solar and Yingli Green Energy shrinking. JA Solar Holdings bucked the trend with a gain in short interest. At the time of this writing, the author had no position in the mentioned equities. Keep up with all the latest breaking news and trading ideas by following Benzinga on Twitter.