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Enough top-performing CAPS investors have turned bullish on solar product maker Yingli Green Energy (NYSE: YGE ) recently to upgrade it from its four-star rank to a tip-top five stars. A sizeable group of 1,047 investors have given their opinion on Yingli, with many of them offering analysis and commentary explaining the recent optimism.
With strong wafer yields and high conversion efficiencies, Yingli grew its operating margins to 20% in the second quarter, higher than competitor SunPower (Nasdaq: SPWR ) , but not quite up to First Solar's (Nasdaq: FSLR ) level. Due to increased demand, Yingli's profit more than tripled and revenue more than doubled for the quarter. The company also foresees prices for raw silicon improving in the fourth quarter, easing the tight supplies that have been squeezing margins of Yingli and competitors Trina Solar (NYSE: TSL ) and LDK Solar (NYSE: LDK ) .
But tremendous growth and the eventual balancing of silicon supply seems to have already been factored in by investors. What really electrified CAPS members was news that Yingli was constructing its first on-grid solar power plant near Beijing. The prospects of more solar projects coming in China coupled with the government's recent decision to jack up its gas, diesel, and electricity prices bodes well for the solar sector. While oil refiners like PetroChina (NYSE: PTR ) will benefit from eliminating the free ride on cheap gas, the higher electricity rates will help Yingli and utilities like Huaneng Power (NYSE: HNP ) . With solar prospects looking up, more than 97% of the CAPS members rating Yingli expect it to outperform the market going forward.