Trina Solar increases profit and gross margin in Q2

Trina Solar did well on the bottom line, although growth wasn't that great. The company made 3 cents more per ADS than it did last year. What I really enjoyed seeing, though, was the improvement in gross margin. It went up significantly both on a sequential basis and a year-over-year basis. Management said that lower average prices for silicon were mostly responsible for this positive development.

We've all been hearing about the promise of solar power not only as an alternative energy source but as a viable investment thesis. Indeed, I'm sure you've been watching the sector, hoping to buy in and ride the wave to a nice chunk of prosperity down the line.

But I don't want to buy Trina Solar right at this moment. At the beginning of the year, shares were below $10. As of Monday's close, they were priced at $26.42. That's a little high for me. Management seems confident that current market conditions will only get sunnier -- and that its business model will benefit from demand for clean-energy systems. Still, I'd have to see an acceptable drop in the stock price before giving the company serious consideration.

Solar power will be an important technology in the future, that much is obvious. Adding a company from this sector to the more speculative part of your portfolio might be something to think about. For more information and opinion, check out my colleague Tobin Smith's recent look at other ideas from this industry.

Disclosure: I don't own any company mentioned; positions can change without notice.