Can Trina and Others Escape Solar Darkness? (TSL, LDK, STP, JASO, TAN, PBW, FSLR)

Oil may still be above $80.00, but solar stocks are on skid row.  The dollar/euro is heading the wrong way, new government uncertainty growing louder, and a concern over all major government subsidies being cut or being eliminated is really taking a toll on the sector.  The obvious outcome of steady lower margins is also trumping the issue of revenue growth.  We wanted to track some key solar names like Trina Solar Ltd. (NYSE: TSL), LDK Solar Co. Inc. (NYSE: LDK), Suntech Power Holdings Co. Ltd. (NYSE: STP), and JA Solar Holdings Co., Ltd. (NASDAQ: JASO).  Even the Guggenheim Solar ETF (NYSE: TAN) and the PowerShares WilderHill Clean Energy (NYSE: PBW) were down and out on the day.  First Solar, Inc. (NASDAQ: FSLR) was one of the only winners today.

Trina Solar Ltd. (NYSE: TSL) beat earnings and raised capacity projections ahead.  It could not avoid the mud slide and shares closed down 6.5% at $22.32 versus a 52-week range of $14.85 to $31.89.  Auriga USA research noted today on Trina, “Trina Solar provided a bigger beat and raise than even our bullish preview had expected. Higher sales and better cost programs led the charge, with bullish commentary on 2011 pricing and volume supporting our above consensus view on 2011. Qualitative fears rule the day, however, and continued volatility in the dollar/euro exchange rate will likely keep investors cautious until companies — TSL included — provide 1Q11 guidance. We maintain our Buy rating and $38 target on slightly increased 2011 estimates.” A $38 target implies upside of 70% to a $22.32 close.  Unfortunately, the world is not heading the right way.

LDK Solar Co. Inc. (NYSE: LDK) was noted as a possible double in a year, and the lower prices just made a double from the lows all that much more possible.  This saw an 8.6% drop to $10.00 today, yet the 52-week range is $4.97 to $15.10.  Suntech Power Holdings Co. Ltd. (NYSE: STP) closed down 1.8% at $7.14, but the stock managed to hit a new 52-week low of $7.05 today.  Ouch.  JA Solar Holdings Co., Ltd. (NASDAQ: JASO) continued its slide from highs with shares down 4.9% at $6.94.  It is still up 100% from lows as the 52-week trading range is $3.85 to $10.24.

First Solar, Inc. (NASDAQ: FSLR) managed to actually close up on the day.  It is hard to celebrate a gain of 0.4% to $122.85, but this was a 4140 stock just about two weeks ago and it was over $150 a month ago.

The ETF picture shows the real directional issue in the sector today: Guggenheim Solar ETF (NYSE: TAN) closed down 3.5% at $6.85 while the PowerShares WilderHill Clean Energy (NYSE: PBW) closed down 2.14% at $9.61.

Solar energy stocks often have severe moves up and severe moves down.  When things are bad, they are awful; when things go right, everyone loves solar.  It is a sector that if Clint Eastwood made a movie or documentary for it, he could name it “The good, the Bad, and the Fugly.”  Today was the latter.

JON C. OGG