First Solar (FSLR) Awarded All DOE Loans, The Bottom Is In

A couple days ago, shares of First Solar (FSLR) first indicated that a possible bottom to the correction was in place.  Jefferies came out with cautious comments but also indicated that there was significant upside potential and traders bid up the stock.  I mentioned the move could be a catalyst for a surge above the 50 day moving average.  That was the case yesterday with the stock closing above the 50 day moving average for the first time since late March. 

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This morning the stock is benefitting from a much larger catalyst.  News that the DOE is awarding loans for all three First Solar projects in California – $680 million for Antelope Valley, $1.88 billion for Desert Sunlight and $1.93 billion for Topaz.  Analysts had been concerned that the DOE program was short on funds and that First Solar would receive only a fraction of the loans it was asking for.  Axiom Capital was one of those concerned firms, but they changed their tune in March and indicated that the DOE did indeed have enough funds and that there was a good chance for First Solar to get funding for more than one project.  So kudos to Axiom for doing their homework.  They were nearly spot on, but probably surprised at the amount of total funding for all three projects. 

Credit Suisse was one of the first firms out this morning dramatically raising its estimates on First Solar.  Here are the increases:

2011 EPS goes from $9 to $9.68
2012 EPS from $9.92 to $14.03
2013 EPS from $8 to $12.62
2014 EPS from $3.70 to $9.29

With heavy short interest in First Solar going in (can you say Jim Chanos?  He’s been bearish and bashing FSLR here and here), it’s all leading to a nice short squeeze in shares of First Solar and the stock is now attacking that next level of important resistance around the 200 day moving average ($140).  I believe that the bottom is now in on First Solar and that any pull back off current levels close to new support of the 50 day moving average is a buying opportunity.

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