All aboard the solar bandwagon! Analysts, trade associations, and now investors are starting to see the promise of solar as more than a crazy environmentalist idea -- it's an economic reality.
Today's big bounce There are a number of solar stocks moving big today. ReneSola Ltd. (ADR) (NYSE:SOL) is up 11%, First Solar, Inc. (NASDAQ:FSLR) is up 8%, and SunPower Corporation (NASDAQ:SPWR) is leading the charge, climbing 19%. There isn't anything earth-shattering moving solar stocks today. National Traders Association released reports highlighting First Solar, SunPower, Trina Solar Limited (ADR) (NYSE:TSL), SolarCity Corp (NASDAQ:SCTY), and others but that's about it. This follows bullish solar reports from analysts at Citigroup and other firms that have given investors license to buy solar.
The move today is a bit curious because it isn't logically distributed among solar companies. Usually, when solar stocks jump they all jump. Some may lead and some may lag, but today there are stocks jumping double digits and some not moving at all. Suntech Power, Canadian Solar, and JA Solar haven't budged despite rivals with essentially the same equipment rising 10%.
Without earnings reports or new industry statistics to point to, it's hard to say why one stock is up and another isn't.
The solar short squeeze -- or not It is also curious to note that the moves of solar stocks recently don't appear to be a short squeeze -- at least not yet. SunPower's short interest has gone up from 4.2 million shares at the end of 2012 to 6.7 million shares today. So, while the stock has gone up 140% this year, investors have actually been adding shares to the market, not taking them away. Usually this addition of shares would cause shares to go down.
Not every solar stock has seen the increase in short interest. First Solar and Power One Inc (NASDAQ:PWER) both have seen a decline in short interest since the first of the year. But, I wouldn't exactly call their share price jumps short squeezes. These are profitable companies and they've risen as investors have bought into solar, meaning short sellers are getting out of the way.
Analysts jump on the bandwagon Analysts have been rushing to upgrade solar stocks, giving investors confidence to buy in 2013. SunPower was upgraded by Lazard in early January, giving a price target of $11 that already looks low. First Solar has been upgraded by Citigroup, Cantor, and Bank of America/Merrill Lynch. Not everyone is on the bandwagon yet but a few more quarters of fundamental improvement and we will see a shift on Wall Street.