Solar Cells Info

Nov. 8, 2007, Investor’s Business Daily delivered by Newstex)
Source: Money.CNN.com
http://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-20819839.htm

Solar power has become a hot topic in growth funds.  Looking at some of the major solar power (OTCBB:SOPW) stocks, institutional ownership has shot up in the past quarter and has reached new highs over the past few weeks. Stocks involved in solar power are helping to drive IBD’s 74-stock Energy-Other industry group, which ranks No. 3 this week in six-month price performance.

First Solar FSLR has gotten a big boost from funds such as American Century Vista TWCVX and AllianceBernstein (NYSE:AB) Mid-Cap Growth CHCLX. Vista, in its latest reporting period, took a new position in the stock at 247,000 shares, or 1.1% of assets. The AllianceBernstein fund went to 89,000 shares from 11,000, bringing its total position to 0.2% of the fund.

First Solar, which went public in November last year at $20 a share, is trading at 167. Volume averages 2.9 million a day. The stock gapped higher in big volume Tuesday after announcing a multiyear deal with units of Babcock & Brown (OOTC:BBNLF) and Econcern to supply solar modules. The company has shown triple-digit increases in sales over the past four quarters and has swung to profits from losses. The company, based in the U.S. and Germany, makes solar panels for megawatt-scale power generation. That has been a hot topic with many alternative energy or green funds.

Many growth managers are also thinking about it because of the push, especially in Europe, for power sources and technologies that don’t use oil, nuclear power or coal. Solar offers one way to meet increasing power demand.

The $6.8 billion Janus Growth & Income Fund JAGIX brought its stake in Suntech Power Holdings STP to 1.39 million shares, pushing it up to 1% of the fund. The previous stake was about 900,000 shares. Suntech’s solar power equipment is used in telecom networks and street lights. A Chinese company, Suntech is well-placed to benefit from the infrastructure buildout in the developing world.

Fast Growth
Earnings growth has been in the triple-digits the past three years, though EPS increases tapered to 53% in Q2. The stock came public in December at $15 a share. It now trades around 65, a new high. Trading has been heavy in the past few days, with volume consistently above the 50-day moving average of 3.3 million shares.

It isn’t just straight growth funds lighting up solar firms’ stocks these days. Suntech fits with international funds as well, such as the $9.4 billion Fidelity Overseas Fund FOSFX. Suntech makes up about 4% of the fund’s assets, which recently increased its stake by 760,000 shares to 2.4 million.

Marlboro, Mass.-based Evergreen Solar (OOTC:ESLRW) (NASDAQ:ESLR) ESLR got a big boost from Fidelity Mid Cap Stock FMCSX in recent months. The $16 billion fund’s position in Evergreen grew to 3.5 million shares from 3 million shares in its latest period. At 0.3% of assets, it is not a big bet for the fund, but it is about $48 million of the company’s $1.38 billion market cap. Other Fidelity funds that hold 1 million or more shares include Fidelity Select Technology FSPTX, Fidelity Adviser Diversified Stock FDTOX, Fidelity New Millenium FMILX and Fidelity Select Electronics FSELX. Another fund with a recent big stake: Legg Mason (NYSE:LM) Special Investment LMASX with 4.4 million shares.  The stock, now trading at about 13, broke out of a cup-shaped pattern this week in big volume.

The number of funds owning SunPower SPWR has climbed to 107 from 69 in December. No less than eight funds have taken up new positions. The biggest new stake was taken up by the $4.6 billion Calamos Growth CVGRX. The fund bought 500,000 shares, worth $72.5 million at the current price of 145, making it 1.09% of the fund. The stock surged 290% this year, with 52% coming in the past three weeks. Since breaking out of a yearlong, cup-with-handle base in January, it has corrected to its 10-week moving average line three times.

Franklin Small Mid Cap Growth FRSGX added 708,900 shares to a 161,900 share position, a threefold increase. That boosted SunPower to 1.3% of the fund’s assets. And American Century Vista grabbed another 24,000, lifting its stake to 250,000 shares. But $82.6 billion Fidelity Contra FCNTX cut its stake in recent quarters to 265,600 shares from 952,227.

Janus Research Fund JAMRX bought 74,628 shares of JA Solar Holdings JASO, lifting the $4.7 billion fund’s stake to 1,685,728 shares. Fidelity Contra has kept JA Solar on its radar, buying 254,600 shares in recent quarters.

JA Solar came public at $15 a share in February and has since vaulted to 60. Long-term investors have had to endure 20%-plus corrections. The Cayman Islands-based company makes solar cells in China that are used in solar modules. Earnings swung from losses for four quarters before surging 320% in Q2. Analysts see a Q3 gain of 227%.

Originally published in the November 8, 2007 version of Investor’s Business Daily.