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 photovoltaic module producer Trina Solar
So what: Deutsche Bank analyst Vishal Shah noted that solar panel inventory levels in Germany are at record low levels and that these low inventories could create a sense of urgency to install before an expected 15% subsidy cut in July. He also said in the same note that solar companies would likely report losses in Q4, but, with estimates already low, many have a shot at outperforming if his thesis on Germany proves true.
Now what: The solar sector hasn't been able to catch a break for a while so it's nice to see them finally have a day in the sun. However, I no longer share the same optimism that Vishal Shah clearly has for the sector. I still see the need for either a bankruptcy or consolidation wave to sweep through the sector to eliminate a glut of competition and truly stabilize pricing. Trina Solar isn't one of those companies I expect to go away and its future does look bright, but I'm not ready to give the company my full endorsement until the outlook for the entire sector improves.
Craving more input? Start by adding Trina Solar to your free and personalized watchlist so you can keep up on the latest news with the company.
