Last week was quite atrocious for the markets, but we managed to come out of it pretty unscathed. This week, we will be looking to continue our successes, starting with today’s Play of the Week and Overnight Trade. We finished off the week on Friday with a Long Term Play in Ford Inc. (F). I like the company’s long term outlook amidst an undervaluation and upcoming GM IPO. I think it has a potential 100% growth opportunity.
The market has been pretty rattled, but there are a lot of basement bargains out there, and the market cannot continue on down like this with the same repetition. I think we will have a seesaw week with some stocks being able to break out while others remain pretty much neutral.
Let’s take a look at a stock that I think has a lot of potential to move throughout the end of the day and break out with earnings tomorrow morning…
Overnight Trade: Trina Solar Inc. (TSL)
Analysis: Trina is one of our Long Term Portfolio Plays that has been the top performer. We got involved at the end of May at 17.25 and have been holding ever since. We have a FV estimate for the company at $30. Trina is one of solar’s top performers and most established company that has begun a solid diversification out of Europe, where in 2008 it did 95% of its business, to the USA, China, and other Asian nations. Tomorrow morning, Trina is set to release its Q2 earnings that are expected to be at 0.49 EPS. This will be a solid improvement from one year ago’s EPS of 0.36.
The company is attractive as an OT for a number of reasons. First off, Trina is in an industry that is performing very well in this earnings season. Nearly every solar company is blowing earnings out of the water. Since they started reporting in August, 10/13 or 78% have reported surprise earnings. One miss from JA Solar (JASO) was due to a large accounting decrease. Most of the major swingers like First Solar (FSLR), Yingli Green (YGE), and SunPower (SPWRA) have all made major movements upwards after reporting their earnings.Trina is in a position where it has most likely been undervalued due to too heavy markdowns on currency exchanges.
Trina, itself, had a very solid May through July and is solar’s company with the highest gross margins due to its ability to produce…
