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Friday, April 29, 2011

ReneSola (SOL) (ASTI) (JASO) (LDK) Should Jump on Total (TOT) Deal

There is no doubt the move by Total SA (NYSE:TOT) to acquire a majority stake in U.S. solar company SunPower Corp. (NASDAQ:SPWRA) will spur the industry, as it will generate the idea of who may be next to be infused with cash, such as Ascent Solar Technologies (ASTI), JA Solar (NASDAQ:JASO), LDK Solar (LDK) and ReneSola (NYSE:SOL).

It must be kept in mind that the China-based solar companies already have access to capital, so it probably won't affect them as much, although they'll more than likely be pulled up with the rest of the sector over the short term, based on speculation.

Analysts were surprised by the decision of Total, as the solar industry, if you can call it that, is pressured by slow sales, rising costs of raw materials, financing, no real market for the product, and shrinking government support.

If it wasn't for government subsidies there would be no solar market, and the general population couldn't care less about solar, contrary to media allusions to that effect.

That's not to say you can't make money in the industry, as it's subject to wild swings because of it being a media darling and even when it's debatable as to the validity of the industry as a whole, it won't stop the media from hyping it up and causing the share prices of solar companies to jump, as they will on the news of the deal by Total for SunPower.

3 comments:

Anonymous said...

the outhors opinion is as much of a speculation as any media.. Im sorry to say but when you see the sales of JASO, TSL, First Solar and so on. , for the last 5 years you can see how big the market is. You cant call a 100 billion $ sales - a NO market :D.. Execuse me for saying but educate yourself a little before writing.

Manan said...

EverythingGold is always bearish on Solar.

Anonymous said...

FACT: Solar is the fastest growing industrie in the world and has been for the last 7 years.

Rob