Investors are yet again taking a shine to solar stocks. Even
with an overall drop in the industry in 2011, long-term investors
are looking to solar panel technology. Capital expenditures on new
solar equipment is projected to rise 30% next year to around
But questions remain as to whether companies will actually benefit.
Some big-name players have gone bankrupt in recent years (Solyndra,
anyone?) while other companies are struggling with dismal balance
sheets. The future could still be bright, if investors proceed
Canadian Solar, Inc.
) has provided great returns so far this year and closed Wednesday
at a new 52-week high. Analysts have reported strong earnings
growth for next year, but the company is highly leveraged, which
could cause problems in the future.
) is a more established player with a strong balance sheet that
could help in the event of another downturn in the industry. First
Solar has also been focused on emerging markets. And while other
companies are struggling paying down debt, First Solar is
leading the charge
Another company on our firm's list is
), a potential growth company with a current ratio of 1.60,
stronger than others in the sector. While earnings took a beating
in the past year due to oversupply, SunPower has been able to
reverse the trend and inch back toward positive cash flow.
The solar industry is a difficult one to gauge. The technology is
still new and competes with many other alternative energy sources.
Breakthroughs in technology in the near future may help investors
judge which companies will last. For now, considering all
fundamentals and product pipelines can help inform investment
This story by Antonio Alfonso originally appeared on
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