First Solar has been the lead story in the US solar manufacturing world for the last few years. The stock of FSLR has demonstrated the story of the company, rising above $300 a share in 2008 and falling below $100 in 2009.
Now FSLR is back to $121, which ironically is where it was 2 1/2 years ago right now. Anyone who invested in this stock back in July of 2007 is sitting at break-even. But the ride has been anything but uneventful. Solar PV manufacturing was a big deal in 2007 and early 2008, then started to fade abruptly. By 2009 a lot of solar stocks had fallen sharply. Today the market is divided on which direction solar is going to travel. Will oil prices continue to slowly creep up, and therefore give a big boost to the solar community again? Or will energy prices stay flat or decrease (along with a flat economy) and solar will be stagnant or decline?
First Solar is sitting in a good spot either way. The company has better manufacturing, improved quality and output on their solar panels, and overall a more stable environment than they had in years past. First Solar should continue to be the focus for large scale contracts from governments (federal, state, foreign) and from large corporations (mostly utilites). Their presence as a domestic manufacutring firm helps them, along with a strong brand name (in a young industry).
FSLR has substantial upside and a strong management team in place. As other solar photovotaic providers struggle or fade, look for FSLR to keep winning the contracts and getting the business, especially in the domestic market. The stock price should reflect that as well. FSLR at $121 is not cheap, but it is still a decent bargain. Any weakness from this price point should be considered an opportunity to buy.
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