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Four Reasons First Solar Is Not So Hot


Company may be replacing Wyeth on S&P, but there are still reasons to be cautious.


What a difference a day makes. I'm not sure what happened, but the back pain I've been complaining about the last couple of days just up and disappeared. I feel like I grew an inch overnight and can run a marathon today.

Asian stocks didn't exactly end the week on a high note. The Hang Seng and the Nikkei were off 2.77% and 2.47%, respectively. European stocks were in the red earlier this morning too. And here in the US, we're currently trading…

Here's what I'm seeing this fine Friday morning:

First Solar (FSLR):
Move over Wyeth (WYE).

Apparently, First Solar is going to take its place on the S&P 500 Index.

Some quick thoughts:

The stock could get a bounce on the news. If and when that happens, the shares could gain some extra attention, too. But I'm still not that jazzed over it.

2. At 19.8 times this year's estimate the shares don't have too much room to run in the near term.

3. The data I'm seeing shows that the estimate for this year and next has come down a smidge over the last 30 days.

There could be a trade here (with the caveat that the larger market could be a bit bumpy today). But if I were looking to hop in for the long haul, I'd probably wait to see if I could get a better entry point.

Accenture (ACN):
The consulting firm kicked out a fourth-quarter profit, excluding items of $0.63. That was in line with Street expectations.

However, for fiscal 2010, it's looking for $2.64 to $2.72. That may cause some people's pants to get in a bunch because the estimate I'm seeing is $2.77.

Some thoughts:

1. That fiscal 2010 outlook isn't exactly white-hot. But at the same time, the following from the release sticks out to me as a big positive:

"Its Board of Directors has declared an annual cash dividend of $0.75 per share, an increase of $0.25 per share, or 50%, over its previous annual dividend, and has approved moving from an annual to a semi-annual schedule for the payment of dividends starting in the third quarter of fiscal 2010. The Board has also approved $4.0 billion in additional share repurchase authority."

2. Management wouldn't want to drop that kind of coin unless it were upbeat about the future and thought it had the ability to do it. I view it as a good sign.

3. And 13.8 times the fiscal 2010 estimate isn't unreasonable. I like this company, what can I say?

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No positions in stocks mentioned.

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