VIEWS: 4 PAGES: 3 CATEGORY: Financial Models POSTED ON: 1/23/2013
While Mitchell Clark wouldn’t be buying much in this stock market, he notes that this energy penny stock is ripe for some price action.
Finding Opportunity Within the Solar Energy Carnage The stock market continues to be highly vulnerable right now, especially among large-cap technology stocks, as corporate earnings aren’t good enough. Stock market traders and speculators are not going to get any tailwind from the broader market, so if taking on new positions, your confidence has to be high. I wouldn’t be buying much in this stock market, but there are trades bottom-fishing among small- and micro-cap technology stocks. Event- driven trades are still working in this market; although less so with the main stock market indices in decline. The operating environment keeps getting more difficult due to declining fundamentals, but then again, valuations remain fair. Here is a technology stock that’s ripe for some price action. STR Holdings, Inc. (NYSE/STRI) is a technology company designing products for the solar photovoltaic industry, and the stock’s been in a big downtrend since last October. With the marketplace basically abandoning this company, the stock looks way oversold. Trading around $2.45 a share, this technology stock has approximately $1.75 per share in cash and no debt. The company’s next earnings release should make for an interesting trading opportunity. STR’s stock chart is below. CHART COURTESY OF WWW.STOCKCHARTS.COM There was a time not too long ago when solar energy stocks were some of the hottest technology stocks the market had to offer. Of course, that period was short-lived, and it’s been carnage in this sector ever since. But, for all the turmoil, you see a lot more solar panels around, so the industry isn’t dead, and that’s why there are decent turnaround trades in this sector. The stock market has been hard on most solar energy technology stocks, but particularly so with JA Solar Holdings Co., Ltd. (NASDAQ/JASO). In 2008, this stock was trading for $25.00 a share; now it’s at penny stock status, trading for a measly $0.64. The stock is still highly liquid, and the company is valued at over $100 million, but it may lose its listing on the NASDAQ because it’s trading below $1.00 a share. JA Solar’s stock chart is below. CHART COURTESY OF WWW.STOCKCHARTS.COM I’d watch this entire sector as companies report their quarterly earnings; there will be some decent event-driven trades with these technology stocks. The near-term outlook for the rest of the stock market isn’t good, with corporations reporting poor revenue conditions. The stock market to me looks like it has topped out for quite a while.
"Finding Opportunity Within the Solar Energy Carnage"