This Solar ETFs Near Term Outlook Could Be Improving
“The solar sector had a string of much-needed positive announcements Thursday, with a fourth-quarter beat by JA Solar Holdings Co. (JASO) and an acquisition by SunPower Corp. (SPWRA, SPWRB) among the factors helping push the sector higher. These events, along with a major contract win for ReneSola Ltd. (SOL) announced Thursday, show that the near-term outlook for the sector could be improving, analysts said. For weeks the sector has been trading mostly lower following news in January that Germany, a major customer for solar products, has proposed cutting subsidies to solar-power providers by 15%. Germany accounted for about half the demand for newly installed solar systems in 2009, Cowen & Co. analyst Robert Stone said,” The WSJ Reports.
“Since that proposal emerged, the Claymore/MAC Global Solar Energy Index ETF (TAN), an exchange-traded fund that tracks many solar stocks, has fallen about 26%. But the fund was up 2.2% to $8.41 in recent trading. JA Solar, which recently traded up 9% to $5.08, was one of the first solar companies to report this earnings season, and investors likely think the company’s top- and bottom-line beat bodes well for the rest of the sector’s upcoming results, Broadpoint AmTech analyst John Hardy said. The beat came in part due to higher-than-expected shipments in the quarter, and the company also pushed up its guidance for 2010 shipments,” The WSJ Reports.
“Demand for our products continued to exceed our ability to produce,” Chief Executive Peng Fang said on a conference call, according to a transcript provided by FactSet Research. Fang said demand was not only coming from Germany, but also such places as Italy, France, Spain, Greece, Czech Republic and Korea, with new markets growing in places like Japan and China. Also, the U.S. is expected to be a significant market in 2010, Fang said.
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Here is a closer look at the Claymore/MAC Global Solar Energy Index ETF (TAN):
The investment (TAN) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MAC Global Solar Energy index. The fund normally invests at least 90% of total assets in common stock, ADRs and GDRs that comprise the index. It generally will invest in all of the stocks comprising the index in proportion to their weightings in the index. This fund is nondiversified.
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