The solar stocks had a great year in 2013, but stumbled for the first half of 2014, especially in the spring momentum stock meltdown. However, many of the solar names have ended up having a great 2014.
The best performing ones are the U.S.-only names. SunPower(SPWR) is up 29% for the year. SunEdison (SUNE) is up 66% for the year, as they've been able to talk about their plan for aYieldCo spinoff. First Solar (FSLR) is up 29% for the year.
There is also, you have the magic beans of Elon Musk over atSolarCity (SCTY). That stock is up 22% for the year, mostly because of its big acquisition of module-maker Silevo.
Then, you have an in-between solar company such as Canadian Solar (CSIQ). Although it's based in Canada and has a lot of its module sales around the world and utility sales in North America, it's also treated by many investors like a Chinese solar company because almost all of its manufacturing facilities are based over there. Still, it's having a great year. The stock is up 28% for the year after being down 50% at one point earlier in the year.
Many of these names are still interesting but there is one sector in the entire solar industry that has really lagged so far: the Chinese solar names.
Many of the Chinese solar stocks had their initial public offerings in the run-up to the 2008 financial crisis. Pre-crisis, they were a play on the view that there was going to be a super spike in the price of commodities thanks to the serious growth of China. Back then, Goldman was calling for the price of oil to spike up to $200 a barrel. So solar seemed like it would have to take off in order to ease the high cost of commodities. China was the cheapest place to assemble solar panels, so suddenly a bunch of Chinese stocks started going public to an eager American market.
To give you a sense of just how big a bubble we saw, JA Solar(JASO) hit a price of $367 per share in December 2007. It's now trading at less than $10 per share. It's a $500 million market cap stock today. It was worth $17 billion back in 2007. To put JA's current stock price in perspective, it's about where it was at the March 2009 lows.
The stock got up to $47 per share in late 2010 after the reflation in stocks started to happen and people started to get more bullish about solar. However, shortly after that, the price of polysilicone started falling. There was a glut of supply in China and concerns of too much competition and saber-rattling between the U.S. and Chinese governments on tariffs.
This year, JA Solar is up 8% for the year. Trina Solar (TSL) is up 4%. JK Solar (JKS) is up 7%. And Yingli Green Energy (YGE) is down 26% for the year. So, if you want an unloved part of the solar space that is lagging on the participation, look to these Chinese names.
