Energy

Solar Sector Recovery Hits a Speed Bump

solar power
Thinkstock
In the past year or so, solar stocks have mounted an almost unbelievable recovery. At one time, the top performer’s shares were up nearly 1,000% from a year earlier, and several jumped more than 100%.

The biggest gainers were mostly the Chinese makers. Trina Solar Ltd. (NYSE: TSL) was up nearly 340% in March from a year before. Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) was up nearly 300% in early October from October 2012. Canadian Solar Inc. (NASDAQ: CSIQ), headquartered in Ontario but with substantial manufacturing capacity in China, was up nearly 1,000% in early March from a year earlier.

The rally ran out of gas this winter. The stocks started to really pull back in early March as investors who had built up sizable gains in momentum stocks took profits. Solar shares were among the biggest losers, with shares falling 20% or more. Still, as of Thursday’s close, Canadian Solar is up 550% from a year earlier, with Trina up about 180% and Yingli up 100%.  (U.S. stock markets were closed for Good Friday.)

The latest leg of the pullback came last week after Trina announced last week that it would miss its estimated first-quarter solar PV shipment total by about 20%. Trina dropped nearly 4% while Yingli was off 6.5% and Canadian lost 6.3% the day of the announcement.

ALSO READ: Do Solar Energy Stocks Still Matter?

Trina said that short-term issues caused the lower shipment rate as it and other Chinese solar makers negotiate the anti-dumping tariff imposed by the European Union. The Chinese have already agreed voluntarily to raise their prices to account for the government subsidies they receive. What investors have begun to understand is that the agreed prices leaves the Chinese solar makers to compete with both European and U.S. solar makers in what has long been the Chinese companies’ largest market.

The agreement the Chinese makers have made with the EU is essentially identical with the tariff the Europeans were going to impose. The companies have basically agreed to raise their module prices by as much as 50%. If these companies cannot offer a low price, their chances of winning substantial business in the EU is seriously challenged.

Trina’s shares closed at $11.77 on Thursday, down 1.9%. in a 52-week range of $3.78 to $18.77.

Shares of Yingli closed at $4.14, down 1.9% in a 52-week range of $1.95 to $8.77.

Canadian Solar shares closed $26.46, down 1.9%, in a 52-week range of $3.70 to $44.50.

ALSO READ: Nine Stocks That Could Double in 2014

Want to Retire Early? Start Here (Sponsor)

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

 

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.