Solar Wakes Up

We have been slowly buying shares of our favorite solar companies in the last few weeks after prices came down substantially in January after an amazing 2007. We were actually disappointed last year because we couldn't continue accumulation of many of our favorite solar companies because they spent most of the year above their fair value according to our proprietary metrics. However, we got a green light in late January and were able to get favorable prices for companies like WFR and STP. Since I posted about solar on February 6th (5 trading days ago), our favorite holdings are all up over 10%. Most of that gain came after First Solar reported an amazing quarter before the bell this morning:


Sun Tech Power has its earnings call next Wednesday and we are expecting another strong quarter. I have learned in my short amount of time blogging that it is usually not a good idea to gloat in a blog post because the post stays up forever and you will probably end up with egg on your face, so please allow me to hedge my bets a bit. While we believe that solar continues to be one of the most exciting parts of the alternative energy space these stocks are not for the faint of heart. Not unlike my Google recommendation several weeks ago I feel that solar stocks may endure another leg down before they ultimately continue their rise. When the companies we are most convicted about trade lower than our target prices we begin buying. When the stock price of one of these companies continues to fall we typically buy more of it. We are able to do this because we have a 5+ year mandate and are unconcerned with most market fluctuations. In other words, buying solar now may look horrible in 3 months, but we feel confident that it will look great in 3-5 years.