China-based Suntech Power Holdings (NYSE: STP) is slated to report its third-quarter earnings results ahead of the opening bell tomorrow, and the solar stock looks particularly vulnerable to a post-report drubbing. Sector peer JA Solar (NASDAQ: JASO) fell to an all-time low last week after offering a weak outlook, while Trina Solar (NYSE: TSL) today lowered its revenue forecast for 2008.

Currently, First Call reports that analysts are expecting STP to report a quarterly profit of 42 cents per American depositary receipt. Suntech has a respectable history in the earnings spotlight, having exceeded the Street's forecast in three out of its past four reports.

On the plus side, it seems as though many brokerage firms have already downwardly revised their expectations for STP. There have been 10 cuts to the firm's average 2008 earnings-per-share estimates, compared to just two increases.

Plus, several analysts have issued bearish notes on Suntech in the past few weeks: Jefferies & Co. cut its price target on November 17; JPMorgan Chase cut the stock from "neutral" to "underweight" and lowered its price target on November 16; Raymond James downgraded STP from "strong buy" to "outperform" on November 13, the same day that AmTech Research slashed its price target; and Deutsche Bank cut the stock from "hold" to "sell" on November 10.

This post was written by Minyanville contributor Sean Udall.

JA Solar (NASDAQ: JASO) blew its quarter and lowered guidance, and now the group is under pressure.

I don't think I've ever written a positive word on JASO as they are in the middle tier, essentially a jobber for the solar space. The company make various feedstock products to the final product makers, while being dependent on the core technology and "root" feedstock polysilicon from the likes of LDK Solar (NYSE: LDK) and MEMC Electronics (NYSE: WFR). So it has a timing issue and margin compression issue. The company is facing lower final pricing of their products while having locked in longer term "commodity" pricing at higher prices. So its raw costs are not falling as fast as its own pricing.

The poly guys mentioned above and companies like Sun Power (NASDAQ: SPWRA), First Solar (NASDAQ: FSLR) and Suntech Power (NYSE: STP) don't face these pressures as intensely, though that may not matter much today. STP reports on the 20th this month and I think it will give a clearer picture of the space. Meanwhile SPWRA keeps closing significant deals and FSLR reported the best and has little if any of the funding concerns. So for the leaders, it's a question of how low do they go before the long term positives catch up. Meanwhile, a few of the smaller shops like JASO are in a race against the credit crunch because they need to be able to renegotiate some of their longer-term input costs.

LDK and WFR are still companies that I feel are uniquely positioned, as both have a partial oligopoly status as polysilicon suppliers. In the $15's and lower, it's getting to the point where I may again trade around my core position and look for that beta pop on any significant Naz bounce. Also, this stock could move 50% higher and still be exceedingly cheap on almost any value criteria.

Over 32 years, the portfolio in The Oberweis Report has returned an average gain of 21.2% a year vs. 7.9% for the S&P 500. Here, money manager and newsletter advisor Jim Oberweis, Jr. looks at Suntech Power Holdings Ltd. (NYSE: STP).

"Long-term results notwithstanding, 2008 has been humbling, to say the least. No other year in our history has been as challenging.

"But in our experience, the most favorable buying opportunities tend to fall after a period in which the market has not performed well.

"Although year-by-year results can be volatile, disciplined investors who remain fully invested in a portfolio of high-growth equities selected using our methodology have historically achieved an exceptional average rate of return over long periods of time.

"Suntech Power Holdings Co., Ltd is one of the leading solar energy companies in the world as measured by production output of photovoltaic, or PV, cells, with leading positions in key solar markets such as Germany and Spain.

Suntech Power Holdings (NYSE: STP) shares are trading higher today on reports that the Japanese Ministry of Economy, Trade and Industry (METI) is considering a resumption of subsidies for solar panel makers beginning next year to maintain its lead in the industry. METI will be discussing subsidies at its meeting this week. This could be a good sign for the solar industry and STP. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on GIS.

After hitting a one-year high of $90.00 in January, the stock hit a one-year low of $28.19 in March. STP opened this morning at $42.01. So far today the stock has hit a low of $41.12 and a high of $42.69. As of 12:35, STP is trading at $41.85, up 0.54 (1.3%). The chart for GIS looks bearish but improving slightly, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just two months as long as STP is above $30 at August expiration. STP would have to fall by more than 28% before we would start to lose money. Learn more about this type of trade here.

STP hasn't been below $30 since March and has shown support around $38 recently. This trade could be risky if the company's earnings (due out in early August) disappoint, but even if that happens, this position could be protected by the support the stock might find between $35 and $40, where it bounced over the past month.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in STP.

Minyanville's Sean Udall dares to share the kind of keen insight and actionable information you won't find in any prospectus. Here he answers a reader's burning question about "green" stocks. For more original thought, visit www.minyanville.com.

Professor Udall,

Do you have any opinions on Zoltek Companies, Inc. (NASDAQ: ZOLT)? My wife wants me to buy everything "green". Her last "green" company idea was General Electric (NYSE: GE). I know, right? I bought a little just to quiet the noise level. I'm into a little SunPower (NASDAQ: SPWR) and Evergreen Solar (NASDAQ: ESLR). Does Zoltek have legs?

Thanks,

Minyan L.

Minyan L.,

First, that's hysterical. Second, a word of caution: Going all green, or all of any one thing, is something I'd never advocate. If you do, you do so at your own risk, as nothing in the market is ever as obvious as it seems, especially when it seems totally obvious.

Suntech Power Holdings Co. (NYSE: STP), which saw its stock surge some 150% in 2007, didn't have such a good 2008 so far with its stock plunging about 44% year-to-date. But since setting a 52-week low of $28.19 on March 22, the stock has rebounded nicely, up over 55%. Roller coaster or what?!

Well, today, the maker of photovoltaic cells and modules said first-quarter earnings more than doubled on 76% higher revenue. Earnings reached $55.8 million, or 33 cents an American depositary share, beating analysts estimates of 28 cents. Revenue reached $434.5 million. Gross margins also expanded nicely and Suntech reiterated revenue estimates for 2008.

Early in the morning, STP shares jumped over 7% in premarket trading in response to the report but have not kept this up. Shares are now trading at $45.73, down over 1%, probably declining with the rest of the sector following Goldman Sachs's downgrade of Solarfun (NASDAQ: SOLF) to Sell from Neutral. SOLF shares are down over 18% taking LDK Solar (NYSE: LDK), Trina Solar (NYSE: TSL) and Canadian Solar (NASDAQ: CSIQ) down with it -- 5%, 8% and 13% respectively, to name but a few.

Suntech Power (NYSE: STP) closed at $47.12 Thursday.

STP is scheduled to report Q1 EPS on May 22.

STP June option implied volatility of 80 is above its 26-week average of 73 according to Track Data, suggesting larger price movement.

China Sunergy (NASDAQ: CSUN), a manufacturer of solar cell products in China, closed at $12.58 Thursday.

CSUN is expected to report Q1 EPS on May 20.

Cowen says: "Key issues: Ramp of new cells, expense control, liquidity."

CSUN June option implied volatility of 111 is above its 26-week average of 100 according to Track Data, suggesting larger price risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

"Suntech Power Holdings (NYSE: STP), one of our long-time favorites, is now back on our buy list after being driven down in price by U.S. market volatility and the fallout from a recent earnings report," notes Jim Trippon.

The editor of The China Stock Digest explains, The company is world leader in the manufacture of photovoltaic solar cells and solar electric systems. And, it is developing a new technology to increase solar efficiency." Here is his review.

"The company's solar cells are used to supply power to the electricity grid within China, and it's the number one company in the Chinese solar energy industry. The company's systems also provide dependable power internationally for mobile phone networks and telecommunications relay stations and even street lamps in case of power outages.

"Certainly China is in desperate need of clean renewable sources of energy. Residents of major cities like Beijing and Shanghai are constantly enveloped in a choking cloud of smog. Beijing has said it wants a tenth of its energy to come from environmentally friendly sources by 2010.

"The problem with solar energy has always been the high cost of manufacturing solar cells relative to the amount of power output per cell. Suntech is attacking that problem with rigorous cost control and the competitive advantages that low cost Chinese manufacturers enjoy in the international arena.

Suntech Power Holdings Co. Ltd. (NYSE: STP) shares are trading higher today after the company announced it signed an eight-year deal to buy polysilicon from DC Chemical Co. Ltd. Polysilicon is a major ingredient in the manufacturing of solar cells. If you think that the company won't fall by too much in the coming months now that it has this price for materials locked in place, then now could be a good time to look at a bullish hedged trade on STP.

After hitting a one-year high of $90.00 in January, the stock hit a one-year low of $28.19 last week. STP opened this morning at $31.79. So far today the stock has hit a low of $31.79 and a high of $35.09. As of 12:45, STP is trading at $35.08, up $4.38 (14.3%). The chart for STP looks bearish and steady, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bullish hedged play on this stock, I would consider an April bull-put credit spread below the $25 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 4.2% return in just one month as long as STP is above $25 at April expiration. Suntech would have to fall by more than 28% before we would start to lose money.

STP hasn't been below $25 at all in the past year and has shown support around $30 recently. This trade could be risky if the demand for energy drops off, but even if that happens, this position could be protected by the support the stock might find around $30.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in STP.

Suntech Power (NYSE: STP) is recently trading at $36.75 in pre-open trading, below its close of $45.89 (down 20%).

Thomas Weisel says: "First Glance at 4Q results and guidance; Weak guidance will likely pressure shares."

STP overall option implied volatility of 73 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Suntech Power Holdings Co. Ltd. (NYSE: STP) shares are rising this morning, extending gains made after Friday's "Buy" reiteration by Calyon Securities and helped along by higher oil prices. Coming up later this month is the annual U.S. State of the Union Address, and alternative energy is expected to be a major topic. The industry as a whole could be buoyed by investors speculating that there may be new initiatives for that industry. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on STP.

After hitting a one-year low of $31.41 in June, the stock hit a one-year high of $90.00 this month. STP opened this morning at $68.58. So far today the stock has hit a low of $67.72 and a high of $70.00. As of 10:55, STP is trading at $69.62, up $2.81 (4.2%). The chart for STP looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

Suntech Power Holdings Co. Ltd. (NYSE: STP) shares are are continuing to rise after last week's comments by analysts that suggested a separate energy-tax package if solar tax incentives don't make it into the current energy bill. The comments set off a bullish sector rally on Wall Street that looks like it is continuing into this week. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on STP.

After hitting a one-year low of $29.25 last December, the stock hit a one-year high of $84.94 on Friday. STP opened this morning at $79.32. So far today the stock has hit a low of $78.59 and a high of $82.15. As of 11:05, STP is trading at $80.20, up $1.03 (1.3%). The chart for STP looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 4.2% return in just 7 weeks as long as STP is above $50 at January expiration. Suntech would have to fall by more than 37% before we would start to lose money.

STP hasn't been below $55 since October and has shown support around $65 recently. This trade could be risky if the cost of energy falls, but even if that happens, there should still be demand for alternative energy innovation.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in STP.

Suntech Power Holdings Co. Ltd. (NYSE: STP), a Chinese solar cell company, announced this morning a $1.5 billion contract with Asia Silicon to purchase high-purity polysilicon over the next seven years. The contract secured lower prices for STP than any of its other existing polysilicon contracts. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on STP.

The stock has been gaining over the past two months, and today's sharp jump propelled shares to a new 52-week high. STP opened this morning at $49.89. So far today the stock has hit a low of $49.03 and a high of $54.70. As of 10:50, STP is trading at 54.55, up 7.61 (16.2%). The chart for STP looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $35 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just 3 months as long as STP is above $35 at January expiration. Suntech would have to fall by more than 24% before we would start to lose money. Learn more about this type of trade here.

STP hasn't been below $35 by too much since June and has shown support around $39 recently. This trade could be risky if the Chinese economy does not remain strong, but even if it happens, this position could be protected by strong support between $35 and $39, plus the stock's 200-day moving average, which is currently at $37 and rising.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in STP.

Hoku Scientific Inc (NASDAQ: HOKU) subsidiary, Hoku Materials, just signed a pact with SunTech Power Holdings Co Ltd (NYSE: STP) wherein Hoku will sell and deliver polysilicon to Suntech beginning in mid-2009. The deal, which was announced yesterday after the markets closed, has sent the stock skyrocketing up nearly 60% to $7.97 in after-hours trading. SunTech closed yesterday at $32.28 and later gained 9c in the extended trading. Shares of Hoku and SunTech are currently trading up $7.38, or up 60.65%, and at $33.00, or up 2.11%, respectively.

The $678M agreement, which has a 10-year term and also allows either company to opt out of the last two years, provides for the delivery of polysilicon, used to make solar energy panels, at set prices. This deal follows an agreement in January between Hoku and Sanyo Electric Co Ltd (OTC: SANYY) that may bring an additional $370M in payments to the materials science company.

Hoku is currently in the process of building a $220M polysilicon production plant in Idaho in order to transition further into the solar industry. The plant will produce polysilicon for its own solar panel business, creating 200 jobs in the process, and will offer excess supply to the semiconductor market.

Analysts at investment bank Thomas Weisel believe this could be a good deal for Hoku, particularly amid its transition into the solar industry. The firm, however, is still concerned about Hoku's ability to raise $150M in debt financing, which it is seeking for the plant. Hoku believes it is currently on track with the plant, but if the company is unsuccessful in building the polysilicon plant or if it does not meet certain milestones with its products, the initial direct deposit must be returned to SunTech.