GT Advanced Technologies Bucks Short Interest Trend In Solar Stocks
Among the leading U.S. solar-related stocks, short interest in Advanced Energy Industries, Inc. (NASDAQ: AEIS) and Real Goods Solar, Inc. (NASDAQ: RGSE) shrank again in the first two weeks of September.
However, GT Advanced Technologies Inc (NASDAQ: GTAT) bucked the trend with a significant upswing in the number of their shares sold short.
Short sellers also retreated somewhat from First Solar between the August 29 and September 15 settlement dates. Short interest in SolarCity, SunEdison and SunPower was essentially the same at the beginning and end of the two-week period.
In addition, the number of U.S.-listed shares (or ADSs) sold short of foreign-based companies China Sunergy, JA Solar Holdings and Hanwha SolarOne and also shrank in the period, while short interest in Canadian Solar, JinkoSolar, ReneSola, Trina Solar and Yingli Green Energy swelled.
Here is a quick look at how Advanced Energy Industries, Real Goods Solar and GT Advanced Technologies have fared and what analysts expect from them.
Advanced Energy Industries
After three periods of shrinking short interest, this maker of power conversion products had more than 1.66 million shares short in the middle of the month. That was more than 4 percent of the total float. The days to cover dropped from more than six, a year-to-date high, to about four.
Shares reached a new 52-week low in early August and they still struggle to recover from news of the chief executive's retirement. The Colorado-based company has a market capitalization near $755 million. Its price-to-earnings (P/E) ratio is less than the industry average.
Only four of the 10 analysts who follow the stock and were surveyed by Thomson/First Call recommend buying shares, but three of them rate it at Strong Buy. Their mean price target, or where the analysts expect the share price to go, suggests there is more than 14 percent potential upside.
The share price ended the two-week short interest period less than 4 percent lower. As of Wednesday's close, it is down more than 16 percent year-to-date but above the 50-day moving average. The stock has underperformed the broader markets over the past six months.
Real Goods Solar
Short interest in this company now known as RGS Energy fell more than 9 percent to more than 5.65 million shares during the period, the lowest level of short interest so far this year. The number of shares sold short still represents more than 13 percent of the float, and the days to cover is almost nine.
The Colorado-based solar energy company ousted its chief executive after the most recent quarterly report. It has a market cap of about $75 million. Its operating margin and its return on equity are both in negative territory. Double-digit percentage revenue growth is forecast for the current quarter.
Half of the four analysts surveyed rate the stock at Strong Buy and the others recommended holding the shares. A move to the mean price target would represent a gain of more than 38 percent for the shares. But the shares traded higher than that consensus target as recently as August.
Shares reached a new 52-week low in early September, and they are down more than 53 percent since the beginning of the year. Over the past six months, the stock has underperformed the other two stocks featured here, as well as the Nasdaq and the S&P 500.
GT Advanced Technologies
This Nashua, New Hampshire-based company saw short interest rise about 8 percent in the early weeks of the month to more than 55.85 million shares, or almost 41 percent of the float. That reclaimed most of the decline in the previous period. It would take more than three days to cover all short positions.
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 near $1.6 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 13 analysts surveyed, four of them still recommend buying shares, down from nine Buy ratings three 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.
The share price plunged after Apple's latest iPhone launch, losing more than 33 percent during the settlement period. The share price is still up more than 27 percent year to date, but 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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