Among the leading U.S. solar-related stocks, First Solar (NASDAQ: FSLR), SolarCity (NASDAQ: SCTY) and SunPower Holdings (NASDAQ: SPWR) saw significant declines in the number of shares sold short in the first two weeks of April.
Short sellers also shied away from RGS Energy between the March 31 and April 14 settlement dates. But short interest in Advanced Energy Industries, GT Advanced Technologies and SunEdison increased during the period.
In addition, the number of U.S.-listed shares (or ADSs) sold short of foreign-based companies China Sunergy, Hanwha SolarOne and Trina Solar increased by a double-digit percentages, while in JA Solar Holdings, JinkoSolar and Yingli Green Energy they grew somewhat. But short interest in Canadian Solar and ReneSola shrank in the period.
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Here is a quick look at how First Solar, Solar City and SunPower have fared and what analysts expect from them.
First Solar
Short interest in this Tempe, Arizona-based company fell more than 16 percent in the period to around 10.21 million. That took back a 15 percent rise in the previous period. The number of shares sold short represents about 14 percent of the float. It would take about two days to sell out all short positions.
Analysts are looking for strong revenue growth from First Solar for both the current quarter and the full year. The company has a market capitalization of almost $7 billion. The forward earnings multiple is less than the trailing price-to-earnings (P/E), and the operating margin is greater than the industry average.
The consensus recommendation of the analysts surveyed by Thomson/First Call is to hold First Solar shares, and it has been for at least three months. The current share price is higher than the analysts' mean price target, meaning they see no upside potential at this time.
The share price is more than 19 percent higher year to date but in the same neighborhood as it was a month ago. It is still well above the 50-day moving average. The stock has outperformed the likes of Linear Technology and Sharp, as well as the Nasdaq and S&P 500, over the past six months.
SolarCity
Short interest in this provider of solar energy systems to residential and commercial customers retreated more than 10 percent to about 9.60 million shares. That was the lowest number of shares short since mid-February, and it represents more than 23 percent of the float. The days to cover was less than two.
This San Mateo, California-based company faced lawsuits during the period related to its financial reporting. SolarCity has a market cap of about $5 billion, but it does not offer a dividend. Note that both the return on equity and the operating margin remain in negative territory.