Why Some Solar Shares Popped and Others Dropped

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 stocks are in panic mode this afternoon after the Commerce Department announced anti-dumping tariffs of 31.22% to 250% on Chinese solar imports. As a result, SunPower's (NAS: SPWR) shares are trading 12% higher as I am writing and Yingli Green Energy (NYS: YGE) is down 12% and falling.

So what: In March, the U.S. Department of Commerce announced an initial tariff on solar-cell manufacturers of between 2.9% and 4.73%, and the market saw it as a win for Chinese companies. But those who follow the industry, including me, have been warning that the reaction may be overdone because anti-dumping tariffs have typically been higher in these cases. Today, the other shoe dropped.

The latest tariff will be retroactive 90 days and throws the future of Chinese imports into question.

Now what: Chinese manufacturers have already said they will be able to get around the rules by modifying their supply chains, but until that happens, this is a big win for U.S. companies. SunPower and First Solar (NAS: FSLR) should be seen as the big winners in this case, with Chinese cell makers like JA Solar (NAS: JASO) and Suntech (NYS: STP) being the losers.

This has been one of the reasons I've been high on SunPower recently, and with its already dominant position in the U.S. market, I only see the company's position getting better. I would still buy SunPower after today's move because I think it will help the company grab more share in the United States.

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At the time this article was published Fool contributor Travis Hoium owns shares of SunPower in both managed and personal accounts. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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