SunPower Corporation (Nasdaq: SPWRA) Up On Earnings – Mike Swanson (02/18/11)


Yesterday after the close of the stock market, solar energy company SunPower Corporation reported blockbuster earnings and raised its earnings guidance. Its shares are trading up 7% in pre-market action this morning after already having rallied strongly into earnings this week.

SunPower earning $1.36 per share in the fourth quarter of 2010 when analyst consensus estimates were for the company to earn $1.05 per share.

More importantly, SunPower raised its non-GAAP earnings guidance from $2.00 to $2.20 per share for 2011, which is above the analyst estimates for $1.87 for this year.

SunPower expects strong earnings in 2011 due to projects it plans to come on line in the United States and Italy, with the Italian projects slated to start construction this September.

With a $1.7 billion dollar market cap, the company is one of the leading solar energy companies in the United States and sells solar energy panels and devices from everyone to individuals who want to use them on their home to energy companies and governments.

Even with the current move in the SPWRA shares, the stock still posts a low valuation, with a forward P/E for 2012 of 9.32 and PEG ratio of 0.43. Analysts project earnings growth of 25.90% on average for the next five years and 220 for the next quarter. I expect the shares to rise as these earnings materialize on its balance sheet.



Shares of SPWRA have spent almost a full year in a stage one consolidation base and just recently broke out of this base to begin a full blown bull phase. In a bull phase stocks are buys on dips and pullbacks. Often stocks dip after they announce earnings news so perhaps one will occur now.

There are many stocks in the alternative energy sector that are attractive now and so is the sector as a whole.

Comments

Couldn't afford more than 310 shares as a trade, but looks like might be holding this longer than expected. Only one I bought since you said was your favorite. Also bought one Kevin mentioned EROC which is positive. Thanks, and keep on keeping on. Riley

Another breakout I missed.

Is this a stock pick from you Mike?

Overhead resistance comes from a long time ago.

Wait for a pullback?

I talked about this stock on Monday.

Sold about a quarter of my position this morning. May look to add if it pulls back much more. I was trading solar a lot last year and noticed that there is a lot of volatility in this sector. PWER is one I successfully traded out of several times and looks like it has good fundamentals. Another ETF that I haven't seen mentioned is PBW. It is priced between KWT and TAN. I like TAN a lot because it seems to move about the same percentage as FSLR without having to pay as much for the shares.
Thanks Mike for the heads up on solar as I had been sleeping on that sector the last few months.

David

And in the Stock Picks section to boot.

Sorry. I'm new here and still learning how to trade.

BoB.

I bought when Mike first mentioned it up nicely, thx Mike.


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