Chinese Solar Goal Lifts Sector Stocks

Solar Farm Desert
Solar Farm Desert

When the Chinese government's National Development and Reform Commission announced yesterday that it will add 10,000 megawatts of solar capacity in 2013, today's jump in solar stocks be came a sure thing. How China plans to install all those systems remains unsaid, but, hey, we're talking about solar stocks here.

Shares of Chinese Solar makers are soaring since the first of the year, led by LDK Solar Co. Ltd. (NYSE: LDK), which is up nearly 53%. That's the same LDK Solar that has posted a net loss of at least $1 per ADS for the past year and a half.

Other solar stocks with big gains since January 2nd include Hanwha SolarOne Co. Ltd. (NASDAQ: HSOL), up almost 37%, Trina Solar Ltd. (NYSE: TSL), up more than 33%, Yingli Green Energy Holding Co. Ltd. (NYSE: YGE), up nearly 30%, JA Solar Holdings Co. Ltd. (NASDAQ: JASO), JinkoSolar Holding Co. Ltd. (NYSE: JKS) up more than 20%, and Suntech Power Holdings Co. Ltd. (NYSE: STP), up nearly 20%.

Even U.S.-based, but French-controlled, SunPower Corp. (NASDAQ: SPWR) is up 48%. First Solar Inc. (NASDAQ: FSLR) is up a modest 7% to lag far behind the field.

The low prices for the solar stocks make them a perfect target for traders looking for a fast and volatile play. Whether or not there is any fundamental reason for the shares to trade at less than a buck or at nearly $7 is irrelevant. LDK's 52-week range is $0.71 to $6.92, and its trading at $2.22 today, up nearly 8% from yesterday.

LDK's high is nearly 10x more than the low. No one can put a value on the stock with a range like that. Solar stocks are like slot machines: put in some money, pull the handle, and hold on.

Filed under: 24/7 Wall St. Wire, Alternative Energy, China, Green Biz Tagged: featured, FSLR, HSOL, JASO, JKS, LDK, SPWR, STP, TSL, YGE