Undervalued Chinese solar companies --- Buy them all on the fire sales
June 11, 2008
– Comments (6) |
RELATED TICKERS: HSOL
, STP
, YGE
As 6/11/08, major Chinese polysilicon solar players are down 30%+ from its recent high. It appears that the bull runs start before earnings and it peaked on or a few days after the BLOWOUT earning.
Hurt by thin-film solar competition talk? FSLR insider stock sales talk? German tariff cut?
This is typically what happens to those buying on headlines. Now all these stocks came down to the level before the earning run, it makes me think price at this level are very attractive given that all earning reports from these solar players are all positive and the growth for Solar in the next 5 years are real and here to stay.
Oil crisis are now the top headline on CNBC. Soaring crude oil price (@$136) is making solar stocks even more attractive.
Here comes my top 5 list of Chinese solar stocks to buy: (1 year target)
1. SOLF (strong buy @ $19.5): target $33
Story on 5/21:
(AP Wednesday May 21, 10:00 am ET) The stock climbed $3.22, or 12.8 percent, to $28.46. ....Early Wednesday, Solarfun said its first-quarter earnings rose to $15.3 million, or 32 cents per American Depositary Receipt, on $131.3 million in revenue, as higher selling prices offset higher raw-materials costs. The results blew past Wall Street estimates of 16 cents per ADR.
It beats handsomely by 10 cents if not counting the currency gain of 6c. If counting no EPS growth for the next 3 Qtrs, the forward P/E will be 19.5/(4*.26) ~= 19.5
That is darn cheap for growth stocks like SOLF.
2. STP (strong buy @$38): target $60
(AP Friday May 23, 5:12 pm ET) ...Adjusted earnings roughly doubled to 35 cents per ADS on revenue of $434.5 million. Analysts were expecting, on average a profit of 28 cents per ADS on revenue of $378 million, according to a poll by Thomson Financial. ...... Merriman Curhan Ford analyst Brion D. Tanous reiterated his "Buy" rating and raised his 2008 revenue estimate to $2 billion from $1.9 million but lowered his per share profit estimate by 3 cents to $1.64. Analysts expect a profit of $1.57 per share, with $1.99 billion in sales......Shares advanced $1.94, or 4.3 percent, to $46.89, after earlier climbing as high as $47.49.
3. YGE (strong buy @$17.6): target $29
(AP Thursday May 15, 9:23 am ET) ...
Net income for the three months ended March 31 increased to $31.9 million from $1.2 million. Earnings per American depositary share were 25 cents, compared with a per-ADS loss of 36 cents a year ago, which reflects the redemption of preferred shares.
Excluding one-time charges for amortization and stock-based compensation, the company earned 27 cents per share in the recent quarter. Analysts polled by Thomson Financial expected, on average, earnings per share of 19 cents....
4. TSL (strong buy @$38): target $55
(AP Friday June 6, 8:45 am ET) ...For the three months ended March 31, the company earned $12.9 million, or 51 cents per share, compared with $4.8 million, or 22 cents per share, during the same period a year earlier....
5. LDK (strong buy @$38): target $52
(AP Monday May 12, 4:56 pm ET) ... Net income rose to $49.8 million, or 45 cents per share, compared with $49.2 million, or 44 cents per share, during the same period a year earlier... Analysts expected the company to earn 39 cents per share, on average, according to a survey by Thomson Financial.
Enjoy 50%+ gain in 1 year!
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