Why Canadian Solar's Shares Jumped

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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 Canadian Solar rose 12% today after the company announced project sales.

So what: Concord Green Energy is buying five power plants from Canadian Solar for $277 million. The projects total 49 MW, making this a $5.65 per watt sale price, which is elevated from other deals in solar, partly because these sold projects are located in Ontario.  

Now what: The deals will be completed in 2014 which is when it will help Canadian Solar's balance sheet. This is part of a much larger strategy by Canadian Solar to get into the systems business, which is generating much higher margins than panels right now. This is really an incremental positive for Canadian Solar; it's pretty much business as usual for the company, so it doesn't entirely change its future outlook.

Interested in more info on Canadian Solar? Add it to your watchlist by clicking here.

The article Why Canadian Solar's Shares Jumped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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