Canadian Solar (NASDAQ: CSIQ) develops,
manufactures and markets solar module products for the conversion of sunlight into electrical energy. Offerings include solar panels for residential and industrial use, plus customized modules that customers incorporate into their own products. The modules power such special-purpose devices as bus stop lighting systems and vehicle battery chargers. Canadian Solar is incorporated in Ontario, but conducts all of its manufacturing operations through six subsidiaries in China. The firm is actively involved in government projects to bring solar power to rural Chinese communities. Clients are distributors, systems integrators and manufacturers in North America, Asia and Europe.
The company pleased investors last week, when it raised its 2008 output guidance from 200-220 MW to 230-260 MW and boosted its estimated annual revenue from $650-$750 million to $750-$870 million ($836.06M consensus). Management pointed to continued robust market demand for its products.
The stock
popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with two "strong buys", two "buys" and four "holds". Analysts expect a 48% growth rate, through the next year. The CSIQ Sales Growth rate (879.41% yr/yr), EPS Growth rate (-0.14 to 0.61 yr/yr), Return on Assets (9.07%) and Return on Investment (12.20%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 32% of the outstanding shares. Over the past 52 weeks, the stock has traded between $6.50 and $51.80. A stop-loss of $39.70 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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