Why Yingli Green Energy's Shares Popped

Before you go, we thought you'd like these...
Before you go close icon

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 solar manufacturer Yingli Green Energy rose as much as 11% in early trading after announcing preliminary second-quarter results.

So what: Module shipments grew at 23%-24% from a previous guidance increase in the low to middle teens. Gross margin is expected to be 11%-12%, a solid improvement from 9%-11% guidance.  

Now what: Earnings will be released Aug. 30, when we'll find out how close Yingli got to a profit in the quarter. This is one of the most indebted solar manufacturers; I doubt even a 12% gross margin will bring the company to a profit, which will be the long-term challenge. The figures today are a plus, but I will not be a buyer because of Yingli's debt load and the drag that it will have on potential profits.

Interested in more info on Yingli Green Energy? Add it to your watchlist by clicking here.

The article Why Yingli Green Energy's Shares Popped 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading