Why Trina Solar's Shares Jumped

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 Trina Solar (NYSE: TSL  ) jumped 13% today after the company reported second-quarter earnings.

So what: Revenue rose 69% sequentially to $440.7 million and the company's net loss shrunk nearly in half to $33.7 million, or $0.47 per share. Analysts were expecting $375 million in revenue and a loss of $0.57 per share so the company was well ahead of those estimates.

Now what: The impressive figure was that sales were up more than shipments, indicating that module prices were slightly higher in the second quarter. This will have a strong impact on margins, although not even that effect could bring the company to a profit. Even after taking out one-time losses the company lost $15.9 million in the quarter at a time when solar leaders have swung to a profit. It will be a challenge for the company to overcome $1.2 billion in debt, although later this year Trina may actually swing to a small profit if conditions are right. If the company ships 2.3 GW-2.4 GW of modules it now predicts that it will have to increase gross margin to above 15% just to break even, which doesn't make a company worth $550 million a good value. Investors would be better off sticking with companies who are already generating a profit and benefiting from the same trends that Trina Solar is right now.

Interested in more info on Trina Solar? Add it to your watchlist by clicking here.


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  • Report this Comment On August 20, 2013, at 7:13 PM, sonofTesla wrote:

    Yea Travis, how's that working out for you? How bout this...you stick to SPWR (which I do like BTW) but is down considerably from where you said to buy, and I'll continue to put my money on Yingli, Trina, JA Solar, and Hanwha Solar One. In case you haven't noticed, The current tier one Chinese manufacturers are dominating the emerging markets. Hanwha owning South Africa. Yingli now having almost 10% of global market share and on the verge of acquiring Suntech AND IT'S NOT EVEN $4 a share!!!

  • Report this Comment On August 21, 2013, at 9:04 AM, kcsag wrote:

    Mr. Hoium has been playing conservatively, touting players like SPWR and FSLR while missing out the big gains on Chinese solar. I guess YGE and TSL, being the lowest-cost providers among the Chinese manufacturers, will be leading the pack. I am long JASO and HSOL (whose stock price is depressed at this point), with significant position in TAN. GLTA.

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