Solar Thaws Polar Vortex

Written by GSCR Staff   
Friday, 10 January 2014 09:27

As the the country recovers from the coldest temperatures in 20 years, the solar sector is heating up.  We find this ironic as this clean technology ties into the global warming debate which seems ludicrous after this past week.  Several IPO deals may be on the horizon for 2014 and a big accumulation in the space has begun.

Yesterday, Baird raised its price target for SolarCity (NASDAQ – SCTY - $67.49) to $71 and Goldman Sachs added the stock to its Conviction Buy list on Monday.  A quick glance at the options contracts definitely indicates the smart money is bullish on the stock for 2014 at this point.  The bullish sentiment should have a trickle down effect into the small cap space.

Back in mid November we highlighted Canadian Solar Inc. (NASDAQ – CSIQ - $36.91) at the $28.23 mark and the stock has not disappointed with nearly a 31% climb.  The deal flow is simply red hot for the Company.  Even with this price climb the forward P/E is under 16.  The $40 level is certainly in reach this quarter.  Keep this one if you have it.

Much of the sector has run to price levels outside of our normal small cap range.  For those who follow our Opportunity Research, a stock like SunTech Power Holdings Co. Ltd. (OTBBB – STPFQ - $0.55) may offer a unique chance to get in on the next ‘big thing’ at an inexpensive price.  The Company has operations in China and customers on several continents just like Canadian Solar.  As a caution, remember STPFQ is a highly speculative stock.

It looks like we will have unseasonably warm temperatures this weekend before another visit from old man winter next week.  Enjoy it while it lasts.

 

Have a great weekend!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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