Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of solar manufacturer Trina Solar (NYSE: TSL) jumped 11% today after an update of second-quarter guidance.
So what: Shipment guidance was raised to 630 MW-660 MW from a previous range of 500 MW-530 MW. Gross margins are also expected to be 11%-12% from a previous guidance of mid-single digits.
Now what: Prices have been stable or slightly higher in the solar module market, which is helping companies across the industry. What management didn't do was say whether or not Trina was able to make a profit, something that I doubt it will achieve in the second quarter. This is one of the better Chinese solar manufacturers, but it will be a challenge for it to make a profit and pay off debt over the long term. I'm doubtful about its ability to do both, and that's why I won't buy this upgrade today.
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