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SunPower's Future Looks Bright


Alt energy space is one to watch.

Noting some spots of green amongst the reddish rubble today:

Verigy (VRGY): The stock has held well ever since gapping lower on its last report.

SunPower (SPWR): Regulation SHO list may be the reason on this one, as we're still in a dicey situation until Congress approves the tax credit extension. This remains my single favorite name in the solar space.

SanDisk (SNDK): Got the firm bid rumored a week or so back. I got long recently, but will be gone again as the stock moves close to the high $20s. I still think fair value is much much higher, but this isn't exactly the market in which to find fair value.

American Superconductor (AMSC): This could be another regulation SHO effect, but this name has also been annihilated of late, and it's the purest play on wind power.

Cree (CREE): Up large here. Note the theme from the list I published earlier.

Evergreen Solar (ESLR): This is popping from an upgrade, being grossly oversold and the possibility that Barclays will assume its hedge from Lehman (LEH). See my note yesterday.

Monster Worldwide (MNST): Not sure why the Monster is higher, but I've watched this stock for years to help find market turning points. The fact that Monster is dry on a day like today most likely signals either a trading or a durable bottom.

By and large, the 2 areas in tech turning positive today are a combination of alternative energy and various names on the regulation SHO list. Personally, I'm watching Google (GOOG)/ Apple (AAPL) for specific levels as well as a market gauge.

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The Naz can't sustain a rally on just a half move from the SEC and higher oil helping to push the alternative energy group. I haven't called a bottom in tech yet this year, but I feel we're finally approaching valuation levels where bad news may be overly priced into many stocks.

Semiconductors in particular are amazingly attractive no matter what the near-term outlook due to the immense strength of liquidity on the collective balance sheets of the group.

Additionally, these companies have been running extremely lean since 2003 and even becoming more efficient over the last couple years. Inventories are lean, personnel is lean, procurement management is tight, and some consolidation has taken place. At some point, I believe we'll see the SOX run a minimum of 35-45% from whatever bottom we reach.

Bottom line, had the SEC given us an uptick rule today, then I might be willing to wade into longs again and possibly call a durable low. As it is, I've only made 1 purchase in the last 2-3 weeks. I am watching this market and trying to hang onto cash, patience, selective retention of extremely well-valued companies as well as my own sanity while I watch a series of events unfold that, in my opinion, largely could have been prevented.
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Position in AMSC, SNDK, ESLR, GOOG

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