On Watch: Solar Stocks Show No Shine
Whether the markets surge up or down, the solar stocks continue to suffer. One would think the sun vanished off the face of the earth forever by the stock performance in this sector. Today, new 52 week lows are being tagged by companies like Canadian Solar Inc. (NASDAQ:CSIQ) and Hanwha Solarone Co Ltd (NASDAQ:HSOL). Other solar stocks are near their 52 week lows, selling off again today. First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWRA) are two large players that are seeing red. SunPower is trading at $7.18, -0.70 (-8.88%).
Investors are constantly asking when the bottom will be in on the solar industry. To make a bottom a few things must happen first. Oil must surge through $100.00 a barrel. Second, the weak hands must be flushed out of existence. This already happened to some players like Solyndra. This bankruptcy was famous due to the massive amount of government money it received.
Overall, the solar sector is nearing its bottom. The bearish sentiment is at all time highs. When looking for long plays, watch for oil to surge higher. In addition, stick with best of breed companies. The largest of the group should survive and when margins start coming back, profits will be big.