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A Ray Of Sunshine: First Solar, Canadian Solar, JA Solar

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Alternative energy has a bright future.

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Don't let the sun go down on me,
Although I search myself, it's always someone else I see,
I'd just allow a fragment of your life to wander free,
But losing everything is like the sun going down on me.

Elton John and Bernie Taupin

Solar stocks shined yesterday (pun intended) and I think they're going to keep going. Over the past two decades there has been a lot of alternative energy hype from fuel cells to ethanol but it's difficult to argue that solar doesn't have a bright (yeah, I know, it's getting out of hand) future. My favorite continues to be First Solar (FSLR), Canadian Solar (CSIQ), JA Solar (JASO). I also think American plays in the space have great potential although adoption has been curiously slow. The group has become volatile of late but strong earnings could propel these stocks into the stratosphere.

In other news, back on Earth, retail will continue to be important. This morning we get earnings results from two players in the space heading in different directions.

  • Urban Outfitters (URBN) shares have risen by more than 50% since last summer as the company has executed well in the fickle world of young adult retailing. The company beat the consensus estimate in the last two quarters by $0.03 each time. Fiscal Year estimates by the Street continue to edge higher so there is much anticipation the company will beat the official current consensus of $0.23.

  • On the other end of the spectrum is J.C. Penney (JCP) which has seen its shares plunge from $80.00 a share to barely above $40.00 these days. Here's the crazy thing the company has beaten the consensus in each of the last four quarters the last time by $0.16 and yet the shares like those of all department stores continues to deteriorate. The consensus is for the company to post earnings of $0.49 when just three months ago the Street was looking for $0.80. So the good news is management has a chance to positively surprise, the bad news is such surprises have fallen on deaf ears over the past year.
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No positions in stocks mentioned.
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