First Solar, Inc., SolarCity Corp, JinkoSolar Holding Co., Ltd.: Beware Your Choice Of Solar Stock

Daqo New Energy Corporation (NYSE:DQ) actually started out profitable in 2010, and has since been losing that profit, ending with a $200 million operating loss in FY13.  The company has a $300 million market cap.  Moreover, it is based in China, so you have the potential for all kinds of fraud. This smells like another short.

JinkoSolar Holding Co., Ltd (NYSE:JKS) is another China-based company.  It saw a $126 million profit in FY10, which was cut by two-thirds in FY11, which became a quarter-billion dollar loss in FY12, and managed a $31 million profit last year.  Free cash flow ebbs and flows.

And yet, the company has a $712 million market cap. This makes no sense to me. It’s 40% off its high and I think there’s more downside.

Lawrence Meyers does not have a position in any company mentioned.

This article is brought to you courtesy of Lawrence Meyers from Wyatt Investment Research.

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