Suntech Power Shares Jumped: What You Need to Know
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 Suntech Power (NYS: STP) have jumped by as much as 16% today. A couple of solar sector analysts have recently made bullish comments, resulting in a sector-wide rally.
So what: Axiom Capital analyst Gordon Johnson, who had previously predicted "armageddon" for the sector over a year ago, has said that the industry's darkest days may finally be over. Maxim Group analyst Aaron Chew also said he was "pretty bullish on demand in 2012."
Now what: Johnson has upgraded a handful of solar players from sell to neutral, including Suntech Power, as installations in Europe soared near the tail end of last year. The rise in installations helped clear out the inventory glut within the sector, and China also plans on doubling its solar energy use this year and consolidate solar-panel makers. Last month, German installations reached 3 gigawatts, a new single-month record.
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