First Solar, Inc. (FSLR): Is Solar Finally Turning Around?

Honeywell International Inc. (NYSE:HON), another favorite of mine, has already produced some very innovative solar products.  For example, the company’s SmartGrid PV (photovoltaic) module is the first solar panel in the world that is manufactured with an integrated AC module, producing 120 volt AC power on its own, right out of the box.  These two companies represent just a small fraction of the large industrial names that are investing in solar power, and if you are not comfortable putting your money behind a volatile name like First Solar, these may be a nice alternative way to play the coming solar boom.

The Bottom Line

The main reason for the extremely positive reaction to the company’s presentation is that there has been virtually nothing but negative sentiment on the solar industry for the past couple of years.  As such, First Solar, Inc. (NASDAQ:FSLR) has been one of the most shorted stocks in the market.  As of the end of 2012, short interest in the company amounted to a staggering 43% of the float.  Although the recent bullishness has caused many shorts to cover, First Solar still has short interest of 27%.  This leads me to believe that a positive surprise when the company reports earnings on April 29 could lead to even more short covering and another strong rally.

Regardless of whether that happens or not, for those with the stomach to ride out the roller coaster ride that is certain to take place in solar stocks as the industry gets its bearings, First Solar, Inc. (NASDAQ:FSLR) could prove to be a lucrative investment for decades to come.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends 3M.