Dr. Duru submits:

OK, by “stealth” I really mean I have not paid close enough attention to the rallies in several solar stocks. 2010 has been a year of true divergence for solar stocks. Some solar stocks have been in year-to-date rallies and others have been declining all year. The net result is an awful -25% year-to-date performance for the Claymore/MAC global Solar Energy Index ETF (TAN). The winners are even more notable given the general stock market is down for the year. This year’s best performers are Renesola (SOL) and Solarfun (SOLF) which are well-ahead of the entire sector. LDK and Trina Solar (TSL) cling to small to marginal gains for the year after experiencing big losses earlier this year. First Solar (FSLR) rounds out the list with a flat performance year-to-date.

ReneSola (SOL)
I wrote about SOL several times last year as bullish options activity brought the stock to my attention. I completely lost track of SOL this year. Too bad. SOL has nearly doubled this year and is sitting at two-year highs. I cannot recall the last time I could say something like that about a solar stock!

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StreetAuthority submits:

By David Sterman

Investing in clean energy takes a very strong stomach. Share prices in this sector continually soar and plunge depending on whether investors are feeling optimistic or pessimistic. Although the industry may never live up to the grandest hopes that some had expected, it is clearly emerging as a viable business with real profits and likely moderate long-term sales growth rates.

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JDS Uniphase (NASDAQ: JDSU) announced that it is entering the solar industry as a supplier of concentrator photovoltaic (CPV) cells.

The company, which is an established supplier of optical products for telecommunications service providers, cable operators and network equipment manufacturers, is expected to make a big splash in the CPV sector, which has only a limited number of cell suppliers.

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Tom Konrad (AltEnergyStocks) submits:

I’ve been researching and writing this series about investments that will benefit from peak oil for half a year. If you’ve read the 20+ articles in the series so far, you’ve learned about several stocks that should be well positioned to benefit from rising oil prices, and you should also have a good idea about which sectors are best to avoid.

On the other hand, if you are just coming across my writing now, you’re about to learn about a single investment that should not only benefit from peak oil, but it will give you diversification at a fairly moderate cost.

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Michael Lofing submits:

ReneSola (SOL) reported record revenues, earnings and solar product shipments during the second quarter 2010. During the global financial crisis at the end of 2008 and beginning of 2009, the company recorded inventory write-downs, impairments of investments and overall poor earnings. The first quarter of 2010 showed promise with improvements across the board, including positive operating cash flow and positive gross and net income margins; however, the company must show this is a trend and not just an anomaly.

Strong financial performance in the first six months of 2010 has improved many of the company’s rankings. Strong operating cash flows and less capital expenditures have the company ranked 5th on operating cash flow-to-net income and 2nd on free cash flow-to-net income. Significant improvements in two components of the cash conversion cycle has the company ranked 5th. Considerable debt relative to both equity and cash put the company at 31st in terms of debt-to-equity and 25th in terms of cash-to-debt. The company ranks 6th in research and development expenses as a percentage of revenues because the company has been investing significant amounts to improve its business.

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James Shaw submits:

The solar sector has became one of the hottest sectors in the US stock market the last few months. This is especially true for most of the Chinese ADRs.

Several stocks are making new year highs, several are nearing their year highs, and several are breaking out of their recent resistance. Even the recent market meltdown cannot bring them down.

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Investing Hobo submits:

China Sunergy (NASDAQ: CSUN) is the smallest of the US listed Chinese solar companies and currently only operates in cell production vertical. At face value, their Q2 earnings (see earnings call transcript here) were quite good. Revenues soared 107% year over year and 23% sequentially to 117m. Earnings were also up significantly as gross margins expanded to almost 20%. Earnings on a per share basis totaled .33 on a diluted EPS basis, compared to .18 EPS reported last year. Not bad for a four dollar stock if they can keep these levels of earnings stable over a longer period.

The advantage of operating in a single vertical is that during boom cycles, CSUN’s level of earnings can look extremely good as they leverage their lower cost structure to meet periods of high demand. The disadvantage of operating in a single vertical is that during down cycles, margins may compress because they don’t have direct control over end sales. CSUN will always rely on the ability of their customers who produce modules to do well. Higher integrated module producing peers have more direct control over costs as well as end demand exposure. As a result, even during down cycles, the level of their business doesn’t fluctuate as wildly as for CSUN. In recent years, CSUN’s quarterly earnings have swung from one extreme to another while some peers have kept their earnings more on a consistent level. The company is in the process of acquiring their sister module manufacturers CEEG (Nanjing and Shanghai), but has experienced delays in completing the merger. If and when this deal is closed, CSUN will operate more as a two vertical module manufacturer much like their larger peer Suntech Power.

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One of the world`s largest solar companies, Canadian Solar (CSIQ), has increased its second quarter profits by 113.3% from the prior quarter, posting net income of $3.2 million, or $0.07 per diluted share, for the three months ending June 30 2010, versus profits of $1.5 million, or $0.03 per diluted share in the first quarter of this year, as demand and pricing in the solar industry continue to be strong.

Net revenues decreased slightly from the last quarter to $328.7 million, compared to $336.9 million, but went up by 187.8% on the prior-year quarter from net revenues of $114.2 million. Gross margin was 13.6% for the second quarter, versus 12.4% in Q1 2010, due to a boost in internal capacity.

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Zacks.com submits:

Canadian Solar Inc. (CSIQ) adjusted EPS of 7 cents in the second quarter of fiscal 2010 ending June 30, 2010, fell short of the Zacks Consensus Estimate of 15 cents and way behind the year-ago quarterly number of 49 cents. The downside came from a sharp rise in expenses, which offset higher shipments year over year. However on a sequential basis the company was able to improve its performance as compared to 3 cents in the first quarter of 2010.

Canadian Solar as of now is undergoing a review by the US Securities and Exchange Commission (SEC) into certain transactions identified in the subpoena issued to the company by the SEC. Earlier in June 2010 the company announced an investigation into the same by its internal audit committee which concluded that the transactions identified in the SEC subpoena were properly accounted in the company’s accounts.

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Wall Street Cheat Sheet submits:

By Elliot Turner

Much of the debate over fossuel fuel emission reduction focuses on whether the economy can absorb the costs of a shift to more climate-friendly forms of energy consumption. The discourse takes a cost-benefit analysis to the change and attempts to rationalize whether the the risks justify the rewards, or simply whether the ends justify the means. As an idealist who enjoys outdoor activities, I can easily come to the conclusion that the ends justify the means myself — to me, a cleaner environment is worth a significant cost – not everyone sees eye to eye on the issue. Political constituents with exposure to the energy and manufacturing sector in particular do not see it this way.

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