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3 Solar Stocks With Short Interest Still Rising

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3 Solar Stocks With Short Interest Still Rising

Among the leading U.S. solar-related stocks, First Solar (NASDAQ: FSLR), SolarCity (NASDAQ: SCTY) and SunPower Holdings (NASDAQ: SPWR) saw the largest percentage increases in the number of shares sold short in the final two weeks of June.

Short sellers shied away from Advanced Energy Industries and GT Advanced Technologies between the June 13 and June 30 settlement dates. But short interest in RGS Energy and SunEdison also increased during the period.

Furthermore, the number of U.S.-listed shares (or ADSs) sold short of foreign-based companies Trina Solar and Yingli Green Energy grew, but short interest in Canadian Solar, China Sunergy, Hanwha SolarOne, JA Solar Holdings, JinkoSolar and ReneSola shrank in the period.

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

See also: First Solar Announces Massive Latin American Project

First Solar

Short interest in this Tempe, Arizona-based company grew almost 24 percent, the second period in a row of rising short interest, to land on more than 11.23 million on June 30. The number of shares sold short represents more than 15 percent of the float. The days to cover was more than three.

First Solar got funding for the largest PV solar plant in Latin America during the period. The company has a market capitalization of about $6.33 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 by Thomson/First Call is to hold First Solar shares, though it has more buy recommendations now than two months ago. The mean price target, or where analysts expect the share price to go, is less than four percent higher than current share price.

Short sellers watched shares surge more than 10 percent during the two-week period, but shares have lost that gain since. 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.

SolarCity

After this solar energy systems designer, installer and lessor saw short interest climb in the previous four quarters, in late June it increased again, about 11 percent, to around 14.28 million shares. That was about 30 percent of the total float. It would take less than two days to cover all short positions.

SolarCity has moved into manufacturing with the acquisition of solar panel maker Silevo. SolarCity has a market capitalization near $6 million. But note that both the operating margin and the return on equity are in negative territory. It is expected to post net losses for both this year and the next.

Of the 10 analysts who follow the stock, eight recommend buying shares, with two of them rating the stock at Strong Buy. While a move to their mean price target would be a gain of more than 21 percent for the shares, that consensus target is less than the 52-week high from early this year.

The share price ended the two-week short interest period more than 34 percent higher, rising above the 50-day and 200-day moving averages, though it has retreated almost seven percent since. The stock has outperformed competitor RSG Energy and the broader markets over the past six months.

See also: Canaccord Initiates Coverage On Solar Sector

SunPower Holdings

Shares sold short in this integrated solar products and services company posted a gain of more than 13 percent in late June to more than 11.93 million. That was on top of a seven percent rise in the previous period and came to more than 26 percent of the float. The days to cover dropped to less than three.

Headquartered in San Jose, California, this company has a market cap of around $5 billion. SunPower announced a partnership with KB Home during the period. The company has a long-term earnings per share growth forecast of about 30 percent, and its return on equity is more than 20 percent.

The consensus recommendation of the 16 analysts surveyed is to hold shares, though it has seven buy recommendations and no Underperform ratings. And they see little headroom for shares, as the current share price is less than three percent short of their mean price target.

Here too, short sellers watched shares increase in the first weeks of June, almost 15 percent, followed by a pullback in July. The share price is down about six percent so far this month. The stock has narrowly underperformed competitor First Solar over the past six months, but it outperformed the S&P 500.

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

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Posted-In: canadian solar China Sunergy First Solar GT Advanced Technologies Hanwha SolarOne JA Solar HoldingsShort Ideas Trading Ideas Best of Benzinga

 

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