The Euro, CurrencyShares Euro Trust (NYSE:FXE) is bouncing higher today as the dollar, PowerShares DB US Dollar Index Bullish (NYSE:UUP) is finally pulling back. However, the markets are having little too no success bouncing. The fear remains too strong. Equities continue to tumble lower.
While all stocks have been brutalized in recent weeks, the solar stocks have seen some amazing declines. Stocks like SunPower Corporation (NASDAQ:SPWRA), Trina Solar Limited (NYSE:TSL) and First Solar, Inc. (NASDAQ:FSLR) continue to be crushed. Just in the last two weeks, many of these have dropped upwards of 30%. Trina Solar Limited hit a high of $27.07 on April 30th, 2010. Less than three weeks later, the stock hit a low today of $14.85. Just in the last four days, SunPower Corp. has dropped from $13.95 to the low today of $10.78. That is a 23% drop in just four days. The 2010 high on SunPower Corp. was $26.35. First Solar, Inc. had great earnings that shot the stock higher to $152.53 on April 29th, 2010. It now hovers just above $100.00 at $105.50. Canadian Solar Inc. (NASDAQ:CSIQ) and all the others have been crushed equally.
Bottom line: Based on earnings for 2010, many of these solar stocks are trading at price to earnings ratios in the seven range. Even if these stocks see much lower earnings, they will probably come in around a price to earnings range of ten. They are attractive at current levels and are definitely due for an oversold bounce short term bounce. If the Euro continues to strengthen it will come with a large bounce as shorts cover. Watch closely.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com