Solar Stocks: Looking for a Value Play (CSIQ, FSLR, GTAT, WFR, SPWR, JASO, LDK, STP, TSL, YGE)

Solar stocks have fallen so far in the past year and a half that there doesn’t seem to be any further for them to fall. But that’s not the way the stocks are being played.

We’ve looked at 10 solar stocks in our search for a value play in the sector: Canadian Solar Inc. (NASDAQ: CSIQ), First Solar Inc. (NASDAQ: FSLR), GT Advanced Technologies Inc. (NASDAQ: GTAT), MEMC Electronic Materials Inc. (NYSE: WFR), SunPower Corp. (NASDAQ: SPWR), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), LDK Solar Co. Inc. (NYSE: LDK), Suntech Power Holdings Co. Ltd. (NYSE: STP), Trina Solar Ltd. (NYSE: TSL), and Yingli Green Energy Holding Co. Ltd. (NYSE: YGE).

Canadian Solar Inc. (NASDAQ: CSIQ) traded at $2.59 and has a market value of around $112 million. The consensus target price from Thomson Reuters is $3.76 and the 52-week range is $2.07-$6.20. Canadian Solar does not pay a dividend. The implied upside to the consensus target is 45%, and we note that the target is above the 52-week high. Short interest in the stock totals 3.74 million shares, or 12.4% of the float.

First Solar Inc. (NASDAQ: FSLR) traded at $18.57 and has a market value of around $1.62 billion. The consensus target price from Thomson Reuters is $23.26 and the 52-week range is $11.43-$93.64. First Solar does not pay a dividend. The implied upside to the consensus target is 25%, and we note that the target is well below the 52-week high. Short interest in the stock totals 31.9 million shares, or 63.5% of the float.

GT Advanced Technologies Inc. (NASDAQ: GTAT) traded at $5.42 and has a market value of around $642 million. The consensus target price from Thomson Reuters is $8.11 and the 52-week range is $3.92-$11.99. Canadian Solar does not pay a dividend. The implied upside to the consensus target is 50%, and we note that the target is below the 52-week high. Short interest in the stock totals 29.2 million shares, or 24.8% of the float.

MEMC Electronic Materials Inc. (NYSE: WFR) traded at $2.65 and has a market value of around $611 million. The consensus target price from Thomson Reuters is $4.35 and the 52-week range is $1.44-$7.19. MEMC does not pay a dividend. The implied upside to the consensus target is 64%, and we note that the target is above the 52-week high. Short interest in the stock totals 27.8 million shares, or 13.6% of the float.

SunPower Corp. (NASDAQ: SPWR) traded at $4.15 and has a market value of around $492 million. The consensus target price from Thomson Reuters is $5.62 and the 52-week range is $3.71-$13.66. SunPower does not pay a dividend. The implied upside to the consensus target is 35%, and we note that the target is above the 52-week high. Short interest in the stock totals 4.5 million shares, or 11.5% of the float.

JA Solar Holdings Co. Ltd. (NASDAQ: JASO) traded at $0.84 and has a market value of around $166 million. The consensus target price from Thomson Reuters is $1.11 and the 52-week range is $0.89-$3.29. Canadian Solar does not pay a dividend. The implied upside to the consensus target is 32%, and we note that the target is below the 52-week high. Short interest in the stock totals more than 10 million shares.

LDK Solar Co. Inc. (NYSE: LDK) traded at $1.21 and has a market value of around $185 million. The consensus target price from Thomson Reuters is $1.35 and the 52-week range is $1.26-$6.92. LDK does not pay a dividend. The implied upside to the consensus target is 12%, and we note that the target is well below the 52-week high. Short interest in the stock totals 10.4 million shares.

Suntech Power Holdings Co. Ltd. (NYSE: STP) traded at $0.84 and has a market value of around $150 million. The consensus target price from Thomson Reuters is $1.80 and the 52-week range is $0.81-$4.80. Suntech does not pay a dividend. The implied upside to the consensus target is 114%, and we note that the target is below the 52-week high. Short interest in the stock totals 17.6 million shares.

Trina Solar Ltd. (NYSE: TSL) traded at $4.21 and has a market value of around $298 million. The consensus target price from Thomson Reuters is $6.98 and the 52-week range is $4.12-$13.21. Trina does not pay a dividend. The implied upside to the consensus target is 66%, and we note that the target is well below the 52-week high. Short interest in the stock totals 12.2 million shares.

Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) traded at $1.56 and has a market value of around $244 million. The consensus target price from Thomson Reuters is $2.62 and the 52-week range is $1.50-$6.27. Yingli does not pay a dividend. The implied upside to the consensus target is 68%, and we note that the target is well below the 52-week high. Short interest in the stock totals 6.1 million shares.

The high levels of short interest in solar stocks should tell the story. Our search for a value play in the sector was essentially fruitless. And a few of the stocks — LDK, JA Solar, and Suntech — appear headed for oblivion. Expecting the Chinese government to orchestrate a consolidation in its solar industry is about the only thing that gives these three stocks any value, but there’s not likely to be any upside anywhere in this sector at least until next year. If ever.

Paul Ausick