Solar stocks are back, and today’s new buy is one of the group’s leaders, a Canadian-Chinese stock with strong momentum. We also have two sell alerts on previous recommendations.
Canadian Solar (CSIQ)
from The Oberweis Report
Canadian Solar designs, develops, and manufactures solar wafers, cells and solar module products that convert sunlight into electricity for a variety of uses. The company is incorporated in Canada and conducts most of their manufacturing operations in China. Products include a range of solar modules built to general specifications for use in a wide range of residential, commercial and industrial solar power generation systems. The company also designs and produces specialty solar modules and products based on customers’ requirements. Specialty solar modules and products consist of customized solar modules that customers incorporate into their own products, such as building integrated photovoltaic modules, or BIPV modules, and complete specialty products, such as portable solar home systems and solar-powered car battery chargers.
The company sells their products under the “Canadian Solar” brand name and to OEM customers under their brand names. The company also sells total solar power system kits for residential applications, and build-to-order solar systems for commercial and solar power plants for utility-scale applications. Canadian Solar sells their products to a diverse customer base in various markets worldwide, though has focused on Canada, Japan, and the U.S. as areas where system development demand is particularly compelling.
The company has largely shifted their business focus from being a module provider to being a solar system/project developer, which brings higher margins. The company’s recently reported financials don’t yet fully reflect this shift, though we believe the company will report significant increases in both revenues and earnings in the coming quarters. In the company’s latest reported second quarter, sales increased approximately 9% to $380.4 million from $348.2 million in the third quarter of last year, though increased 44% sequentially. Canadian Solar reported a loss in the latest reported second quarter but guided to profitability in the upcoming third quarter and expects to report profitability on a full year basis for 2013. Strong Buy at $23.55.
Jim Oberweis, The Oberweis Report, www.oberweisreport.com, 800-323-6166, November 2013