Nov. 11, 2009 (Chinavestor) There seems to be a mismatch between financial muscle and stock price performance within the Chinese solar sector. What we've seen so far is great. Higher revenue guidance from LDK Solar (NYSE:LDK), Canadian Solar (NASDAQ:CSIQ) and First Solar (NASDAQ:FSLR). JA Solar (NASDAQ:JASO) reported much better-then-expected Q3 on November 10. Yet most solar stock haven't moved a bit.
One of the reasons is that the markets are waiting for the big guns to report - Suntech Power (NYSE:STP) and Trina Solar (NYSE:TSL) on November 19, and LDK Solar (NYSE:LDK) between Nov. 16 -26.But it looks to me that if you're willing to take some risk now and buy selected solar plays while they're cheap, the reward is likely to come. Here is why.
First Solar (NASDAQ:FSLR) fell off the cliff following third quarter earnings announcement on October 28 yet the numbers were not as bad. Plus the Company guided higher for the fourth quarter. Take a look at the following chart that follows revenues, earnings and stock price for First Solar (NASDAQ:FSLR).
Or consider the case with JA Solar (NASDAQ:JASO). The Company just reported super strong revenue and earnings growth, jumped 5% the next day just to see all that gain to evaporate throughout the trading day. Besides strong Q3 report, JA Solar (NASDAQ:JASO) issued a higher revenue guidance for the fourth quarter.
Canadian Solar (NASDAQ:CSIQ) issued higher Q3 revenue guidance on October 13. Previous estimates were$203 million that rose to $210-$215 million for the third quarter. But as the following chart testifies, stock price for Canadian Solar (NASDAQ:CSIQ) has hardly been responsive to the positive news.
LDK Solar (NYSE:LDK) issued revenue guidance up from $240-$270 million to $270-$290 million for the third quarter. This is reflected in the following chart - but not in the stock price of LDK Solar (NYSE:LDK).
There is not much visibility for the rest of the Chinese solar sector at this point. But what we've seen is much better then the actual performance of First Solar (NASDAQ:FSLR), JA Solar (NASDAQ:JASO), Canadian Solar (NASDAQ:CSIQ) or LDK Solar (NYSE:LDK). With a slew of solar earnings ahead of us this month, this might be a good time to enter the sector.
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