3 Solar Stocks See Surge In Short Interest
Among the leading U.S. solar-related stocks, short interest in Advanced Energy Industries, Inc. (NASDAQ: AEIS), GT Advanced Technologies Inc (NASDAQ: GTAT) and SolarCity Corp (NASDAQ: SCTY) jumped again in the final two weeks of September.
Short sellers retreated from First Solar and Real Goods Solar between the September 15 and September 30 settlement dates.
Short interest in SunEdison rose marginally, and in SunPower it was essentially the same at the beginning and end of the two-week period. Vivint Solar began trading publicly in October.
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 also shrank in the period, while short interest in Canadian Solar, JinkoSolar, ReneSola, Trina Solar and Yingli Green Energy swelled.
Below is a quick look at how Advanced Energy Industries, GT Advanced Technologies and SolarCity have fared and what analysts expect from them.
Advanced Energy Industries
After three periods of declines, short interest jumped more than 21 percent in this maker of power conversion products to more than 2.02 million shares short by the end of the month. That was more than 5 percent of the total float. It would take almost five days to cover all short positions.
The Colorado-based company welcomed a new chief executive officer at the end of September. It has a market capitalization near $691 million. While its price-to-earnings (P/E) ratio is less than the industry average, it has an operating margin that is greater 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 21 percent potential upside.
The share price ended the two-week short interest period marginally higher. Shares had been trading hands around $19 since mid-August, but then fell more than 9 percent last week. The stock has underperformed the broader markets over the past six months.
GT Advanced Technologies
After an increase of 8 percent in the previous period, this Nashua, New Hampshire-based company saw the number of its shares short rise about 10 percent in late September to more than 61.16 million shares, or about 45 percent of the float. That was the highest level of short interest in at least a year.
The company was expected to be a supplier for the iPhone 6, but it surprised by filing for bankruptcy last week. GT Advanced Technologies now has a market cap of near $111 million, down from more than $1 billion before the news. Its return on equity and operating margin are both in the red.
Four of the 13 analysts surveyed still recommend buying shares, according to Thomson/First Call, though that likely will change. Shares have fallen below a dollar, making the mean price target and potential upside essentially irrelevant as well.
The share price first plunged after Apple's latest iPhone launch, then again on the bankruptcy news. It dropped almost 9 percent during the settlement period, and as of the end of last week was down about 91 percent year to date. So of course it has underperformed the broader markets over the past six months.
Short interest in this provider of solar energy systems to residential and commercial customers saw a gain of more than 19 percent to about 13.80 million shares. That was the highest number of shares short so far this year, and it represents more than 26 percent of the float. The days to cover was less than three.
This San Mateo, California-based broke ground on a huge factory in New York during the period, and competitor Vivint priced its IPO. SolarCity has a market cap of nearly $5 billion. Note that both the return on equity and the operating margin remain in negative territory.
Eight of the 12 polled analysts recommended buying shares, and only one rated the stock at Underperform. A move to the analysts' mean price target would be a whopping 41 percent gain for the shares, as well as a new 52-week high.
Short sellers watched the share price retreat more than 11 percent during the two-week period, and another 10 percent since then. It is still more than $10 north of the 52-week low, however. The stock may have underperformed the Nasdaq and the S&P 500 in the past six months, but it outperformed smaller competitor RGS Energy.
At the time of this writing, the author had no position in the mentioned equities.
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