GT Solar Turns Up the Heat

There are worries of oversupply of solar modules and a proliferation of LED manufacturers in China. But who cares when you're the one providing the equipment to make that oversupply happen?

GT Solar (Nasdaq: SOLR  ) is now more than just a supplier to the solar industry now that it is manufacturing advanced sapphire crystallization furnaces. Its newest business is off to a hot start less than a year after the acquisition was announced.

Just yesterday, the company announced $91 million in orders from three customers in Asia for such furnaces. That follows a $218.9 million order from Guizhou Haotian Optoelectronics Technology, which -- based on my keen understanding of brand names -- probably won't become a household name in the U.S.

Proliferation of LEDs
As is the case in solar, the proliferation of manufacturers of LEDs isn't good news for Cree (Nasdaq: CREE  ) or SemiLEDs (Nasdaq: LEDS  ) . More manufacturers in the industry put pressure on prices, which has been a thorn for both recently.

But other equipment makers like Veeco Instruments (Nasdaq: VECO  ) and Aixtron (Nasdaq: AIXG  ) have benefited from the LED manufacturing growth in China.

GT Solar's business can capitalize on increasing diversification through its sapphire segment. Polysilicon and PV dominated the company's $1.23 billion backlog to end 2010, and as orders for sapphire equipment come in, that reliance will diminish.

GT Solar's stock is back near its 52-week high, but I think the stock has much further to run. The stock's P/E ratio is just 10.5 and forward P/E stands at 7.9, even before you consider the fact the company has crushed estimates recently. That's why I have given GT Solar a thumb up on Motley Fool CAPS. What do you think about GT Solar?

Interested in reading more about GT Solar? Click here to add it to My Watchlist, which will find all of our Foolish analysis on this stock.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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