I Love Suntech Power

I know it's not fair. I know I already opened my heart to one energy-related company this Valentine's season when I said I loved Headwaters (NYSE: HW  ) , but I just can't help myself. My affections truly are torn.

I don't know how else to say this, so I'll just be blunt. I am equally attracted to a younger, foreign, exotic beauty: Suntech Power (NYSE: STP  ) .

Headwaters is slow and steady (it has a very down-to-earth P/E ratio of 11), and it even looks a little frumpy because it deals with such "plain Jane" things as coal and construction materials. Suntech, on the other hand, sports a potentially riskier P/E ratio of 65 and is playing in a smaller, but far sexier, market: solar power.

Will the company return my affection? I believe so. In fact, in the past six months it already has, by appreciating more than 33%. But I'm not just interested in a short, one-time fling. I am looking for a meaningful long-term relationship, and I think this company is ready to make that commitment.

Today, solar energy meets about one-tenth of one percent of the world's energy needs. This number is expected to grow considerably in the years ahead, and as it does, Suntech, along with other leading solar providers such as BP Solar (NYSE: BP  ) , Kyocera (NYSE: KYO  ) , Evergreen Solar (Nasdaq: ESLR  ) , and SunPower (Nasdaq: SPWR  ) , should mature nicely.

So with all those other solar plays out there, you might ask: Why Suntech? Good question. There are a couple of reasons. To begin, it has a good head on its shoulders. For instance, the company now has more than 70% of its silicon wafer needs tied to fixed-price contracts that are below current spot market rates. This should allow the company to continue to compete favorably with those other companies.

Suntech is also constantly working to better itself. Why, just last month, it announced that it had increased the conversion efficiency of one of its solar cells from 15% to 18%. That's the kind of improvement that can keep a company looking young.

Finally, the company keeps things interesting by jetting around the globe. Last year, it was awarded the contract to supply the solar power to the stadium that will host the 2008 Summer Olympics in Beijing. It landed a big deal with Spain's Atersa to supply modules for a 23-megawatt facility, the world's largest solar power plant. And it also signed another deal in the United States to supply its products to a division of SunEdison, North America's largest solar-energy service provider.

Bottom line: This young, smart, world-class beauty should only grow more attractive over time.

Interested in reading more about Suntech Power? Check out these articles:

What's sending Fools' hearts aflutter? Go back to our intro page to see what else we have a crush on.

Fool contributor Jack Uldrich owns stock in Suntech Power. Suntech and Headwaters are Motley Fool Rule Breakers recommendations. The Fool's disclosure policy thinks you can never go wrong with construction-paper hearts.


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