5-Star Stocks Poised to Pop: JA Solar

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese solar cell specialist JA Solar Holdings (Nasdaq: JASO  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at JA Solar's business and see what CAPS investors are saying about the stock right now.

JA Solar facts

Headquarters (Founded) Shanghai, China (2005)
Market Cap $1.1 billion
Industry Semiconductors
Trailing-12-Month Revenue $1.79 billion
Management

CEO Dr. Peng Fang (since 2010)

CFO Ming-Wai Chung (since 2009)

Return on Equity (Average, Past 3 Years) 13.1%
Cash/Debt $348.5 million / $418.6 million
Competitors

Trina Solar (NYSE: TSL  )

Suntech Power (NYSE: STP  )

Yingli Green Energy (NYSE: YGE  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 1,637 members who have rated JA Solar believe the stock will outperform the S&P 500 going forward. These bulls include MRBillsnutjob and All-Star Staka, who is ranked in the top 2% of our community.

About two months ago, MRBillsnutjob tapped JA Solar as a cheap way to get some sun: "The valuation on this stock seems to be low considering the rest of the industry. I feel it is a sleeper that could easily go to 14 dollars in a year. P/E is ridiculously low earnings are good they have beat forecasts for a few times in a row."

In fact, JA Solar currently sports a forward P/E of just 5. That represents a discount to competitors like Trina (6.7), Suntech (8.0), and Yingli (8.0).

CAPS All-Star Staka expands on JA Solar as a stock priced for imperfection:

Positive:
- Huge growth, good margins, low P/E -> cheap stock.
- Industry with long-term growth potential.
- They are the price / quality leaders. Should ensure them a growing market share.
- Will profit from higher oil prices due to peak oil although this is a long-term trend which might not hold short-term.
- A lot of the negativity (see below) already priced into the stock.

Negative:
- China growth could go on for some years or could collapse any time due to the many existing bubbles and inefficiencies. ...
- Biggest market is Europe which will suffer from cuts in subsidies which might create a supply overhang of solar cells. Similar situation with the US market.

What do you think about JA Solar, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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