Solar Stocks on the Nasdaq

There seems to be mounting demand for a complete list of top solar stocks on the NASDAQ.

In my opinion, there is profit to be taken from NYSE solar stocks as well, namely Yingli and Renesola. Perhaps I’ll cover those in a later issue.

For now though, here are my top solar stocks on the NASDAQ, ranked in order of attractiveness:

First Solar (NASDAQ: FSLR)

Who can resist this one? They have the lowest commercial cost with grid parity achieved in most cases. It’s a thin-film technology. And they’ve created economies of scale, establishing dominance in the solar market.

The company consistently sells out capacity because the modules, made out of cadmium telluride, are much cheaper than their silicon counterparts.

FSLR is nearing 11% efficiency in their modules with a cost of $1.00/W.

What’s more, First Solar is the most sought after company for ground-based installations and will continue to get the lion’s share of utility-scale solutions.

Revenue guidance for 2009 is over $2 billion and gross margins have been topping out over 56%.

While they could encounter some downward pressure due to general average selling price declines through Q2, I don’t see the company getting anywhere close to retesting it’s lows.

Looks like support is now around $125, I’d be buying up to about $160. This is your safest bet.

Evergreen Solar (NASDAQ: ESLR)

I believe Evergreen one of the most undervalued solar companies on The Street.

The company will probably take another loss in Q4, around $0.07 or so, but 2009 is looking like it could turn profitable.

Average selling prices (ASP) has slipped a bit to $3.00/watt, and forecasts show a slight dip in expected MW shipped for 2009, down about 60 MW.

We’re still seeing near-term finance constraints for construction, which is slowing the build-out of their Devens facility. However, the ramp of that facility in 2009, coupled with the continued lowering of costs, will keep them in the running.

Buying at this level offers great long-term prospects, as their string ribbon technology only uses 50% of the polysilicon used in traditional processes.

I’m buying up to $4.00 and waiting. This is an easy double-bagger.

Sunpower Corp. (NASDAQ: SPWR)

Sunpower is coming off a major hit, rebounding from as low as $18.50 since it lowered guidance for Q4 by $0.15 back in November. The company also lowered 2009 earnings per share (EPS) by $0.50 to $3.00.

Despite greater declines from competitors, Sunpower’s ASP have stayed relatively high at about $3.45/watt, though a 20% decline is expected through 2009.

Full 2009 earnings estimates are $3.56 per share on revenue of $2.05 billion.

The company boasts the highest module efficiency in the business, has secured all of its raw materials for 2009, and is vertically integrated with a downstream installation unit.

I’d try to get this one below $42.00. A quick run to $60.00 isn’t out of the question in the next few months, especially if earnings come in on target.

Energy Conversion Devices (NASDAQ: ENER)

ENER’s advantage come from its raw material. Rather than using crystalline silicon, which is the dominant raw material in the business, they use amorphous silicon.

Their laminates are competitively priced against traditional modules through 2009, providing a slight barrier against widespread ASP decline.

ENER’s product is also better suited to large rooftop installations like warehouses and industrial buildings. It’s a great product, I’ve seen it. It comes in rolls, is flexible, and can literally be rolled out on the roof.

Since there modules are also lightweight, they’re the only option for roofs that are weight-constrained.

I believe any potential for lower ASP or renegotiated contracts is already priced into this stock.

What’s more, about 70% of ENER sales are in Europe, which has been a good thing given their more advance and generous incentives.

An Obama administration granting support to domestic companies could also give ENER a boost, as all their manufacturing is done in Michigan.

Support seems to be around $20.00, and I’d buy right on up until $30.00. If you can hang on to it for a while you’ll be in for a real treat.

All the Rest

That’s it for prominent choices of solar stocks on the NASDAQ.

But for the sake of completeness, I’ll briefly throw out a few more with any pertinent statistics.

JA Solar (NASDAQ: JASO) – Hold

• Has lowered revenue and MW production guidance for Q4, to $124M and 250 MW, respectively
• Gross margin between 5% – 7%
• Earnings expected to break even
• Seeing reduced silicon prices
• 80% of 2009 orders could be subject to price renegotiation

GT Solar (NASDAQ: SOLR) — Buy

• Maintain FY09 estimates of $0.70/$578.3M, lower FY10 estimates to $0.85/$693.4M from $1.06/$828M
• continue to lead market with DSS furnaces, gain traction with reactors and converter equipment
• lower FY10 estimates based on anticipated reduced spending, still significant long-term growth prospects

Canadian Solar (NASDAQ: CSIQ) – Hold

• lower FY08 estimates to $0.72/$716.5M
• lower 1Q09 to ($0.19)/$77.9M from ($0.09)/$217M
• lower FY09 to $0.41/$723.3M from $0.61/$1.05B
• lower 4Q ASP to $3.21/w from $3.50/w, and 2009 blended ASP to $2.64/w from $2.78/w
• lower 1Q09 MW shipped to 284.5MW from 477.5MW

Here’s a chart of them all, just to show you they’re all still down–most more than 50%–over the past six months:

To green energy, and green profits,

Chris
Clean Energy Sector