For those that have been regular readers of GreenStocksCentral.com you might remember that I used to publish the research notes of Mark Bachman who focuses on the solar industry. At the time he was working for Auriga and now he’s on the move again providing research to clients of Avian Securities. Regardless of who he’s working for I’ve always thought that his solar research was quite good.
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I’ll begin posting his research notes here once again and it starts with notes on Yingli (YGE) and Suntech (STP) both of which recently reported earnings. I’ve posted my own thoughts on the two earnings reports calling YGE a bullish report and STP just more of the same. Here are Mark’s thoughts..
He’s upgrading YGE from Negative to Positive with a price target of $7.70. The firm believes YGE is an outlier seeing early signs of seasonal momentum and increased market penetration. I’ve been saying this in recent days and Mark agrees.. now is the time to begin riding a solar trade with a first dip in shares of YGE. Other firms may begin upgrading the company after the PVSEC show in early September and by then a decent move may have already been made. I’d like to add that any initial trade should be relatively small as there will be plenty of chances to get in on leading solar stocks at discounted prices.
As for Suntech Power (STP) the outlook isn’t as bullish. The firm maintains their Negative rating on the stock as ASP declines likely outpace cost reduction. They see another loss this quarter for STP. Here are highlights of the notes on STP..
==> Click Here For Your FREE Daily Suntech Analysis
– a big miss on EPS and Mark believes the CFO is overstating gross margins and believes the company can’t match aggressive cost reduction targets
– management failed to exude the same confidence that Yingli management did
– its high efficiency Pluto product offers higher margins but that continues to be eroded by higher production costs
– sees further stress on debt heavy balance sheet