Vivint Solar Bucks Short Interest Trend

While short sellers shied away from most of the leading U.S. solar-related stocks between the January 15 and January 30 settlement dates,

in

instead surged by almost a third. The decline in the number of shares short in other solar companies was relatively modest, with

and

among those leading the way. 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.

Short interest in this Tempe, Arizona-based company shrank about 7 percent during the period to around 8.16 million shares, or about 11 percent of the float. Short interest was lower in only one period in the past seven months. It would take about four days to cover all short positions. During the period, First Solar became the first company to have 10 gigawatts of photovoltaic solar capacity installed globally. It has a market capitalization of almost $5 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 16 percent higher than the current share price. The share price increased more than 5 percent during the short interest period, and since then it has surged almost 17 percent. Although the stock underperformed Linear Technology and the broader markets over the past six months, it also narrowly outperformed Sharp in that time.

Short interest in this provider of solar energy systems to residential and commercial customers slipped less than 5 percent to more than 18.83 million shares. That was more than 33 percent of the float, and still about double the number of shares short a year ago. The days to cover rose to more than 10. SolarCity completed the largest solar installation at a U.S. brewery for MillerCoors in late January. SolarCity has a market cap around $5.5 billion. Double-digit revenue growth is expected in the current quarter. Note that both the return on equity and the operating margin remain in negative territory. All but two of the 11 surveyed analysts recommended buying shares, with three of them rating the stock at Strong Buy. A move to the analysts' mean price target would be a more than 32 percent gain for the shares. However, that consensus target is less than the 52-week high reached almost a year ago. Short sellers watched the share price slip less than 2 percent during the two-week period but then soar more than 17 percent since, taking a run at the 200-day moving average. The stock underperformed the Nasdaq and the S&P 500 in the past six months, but it outperformed smaller competitor RGS Energy.

The number of shares sold short in this company jumped about 29 percent in the period to around 2.79 million, or more than 13 percent of the float. That is the greatest number of shares short since Vivint came public last fall. It would take more than five days to close out all of the short positions. This Provo, Utah-based provider of residential solar energy systems says it plans to open 20 new offices in 2015. Vivint has a market cap near $875 million. The return on equity is in negative territory. Analysts anticipate net losses in the current quarter, as well as for the full year and next year. All but one of the five analysts polled recommend buying Vivint shares, with one of them rating the stock at Strong Buy. They see lots of room for shares to run, as their mean price target indicates about 117 percent potential upside. That consensus target would be a post-IPO high as well. The share price fell about 7 percent during the period. It has largely recovered since then but remains below the 50-day moving average and down about 48 percent since the IPO in October. In that time, the stock has underperformed the other two stocks featured here, as well as the S&P 500 and the Nasdaq.

Short sellers also retreated from Advanced Energy Industries, RGSE Energy, SunEdison and SunPower as the volatile month in the stock market wound to a close. The trend continued in foreign-based solar companies, with the number of U.S.-listed shares (or ADSs) sold short of Canadian Solar, JA Solar Holdings, JinkoSolar, Trina Solar and Yingli Green Energy shrinking. However, China Sunergy, Hanwha SolarOne and ReneSola saw gains in short interest during the period.

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