First Solar Now Has Franklin Templeton Funds Among Top Shareholders

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If there is one area of President Donald Trump’s energy policy that remains under a cloud of confusion, alternative and renewable energy has to fit the bill. This has created unknown investor valuation metrics for companies tied to solar energy, wind energy and other renewables.

First Solar Inc. (NASDAQ: FSLR) is frequently deemed to be the king of the solar sector for U.S. investors. With shares recently trading close to $31.30, it should be rather interesting that the stock is only marginally lower than the $32.09 closing price on the last trading day of 2016.

A new 13G filing from Franklin Resources Inc. (NYSE: BEN) shows that the mutual fund manager now may be First Solar’s third largest institutional shareholder. According to the filing, some 6,269,614 shares are now beneficially owned by Franklin and its funds, which is stated as a 6.0% stake.

Wednesday’s 13G filing showed the voting rights per fund, which may not be complete, were as follows:

  • Franklin Templeton Investment Management Ltd.: 98,579
  • Franklin Templeton Investments Australia Ltd.: 196,620
  • Franklin Advisory Services LLC: 11,900
  • Templeton Global Advisors Ltd.: 5,687,660
  • Franklin Templeton Investment Trust Management Co. Ltd: 8,130
  • Fiduciary Trust Company International: 16,405

Even if you go back to before the election, solar energy was set to be a big winner under Hillary Clinton. The unexpected victory of Donald Trump brought on a big rally in companies tied to fossil fuels and infrastructure. What was interesting was that the closing price of First Solar shares was $33.49 on the day of the election. Its stock price only fell to $32.10 after the election, but it later dipped under $30.00 before recovering to $35.00 during December.

All this price action actually doesn’t sound too bad for a company in which there could be serious risks to the business model and tax credits in the years ahead. The post-election drop is one thing, but maybe the notion that this was a $40 stock on November 2 was the real issue.

The following institutions were shown to be the top five outside shareholders as of September 29, 2017, which does not include the Walton holdings of course:

  • Capital World Investors: 7,100,000 shares (6.83%)
  • Vanguard Group Inc.: 6,856,530 (6.60%)
  • Wellington Management Co.: 3,740,266 (3.60%)
  • State Street Corp.: 2,822,743 (2.72%)
  • Dimensional Fund Advisors L.P.: 2,522,156 (2.43%)

While this does not show when Franklin acquired the shares, it is a year-end filing. The signed date (on page 12 of 15) of the filing was also shown to be January 26, 2017.

First Solar shares traded down 1.1% at $31.40 midday on Wednesday. First Solar has a market cap of close to $3.3 billion, and the stock has a 52-week trading range of $28.60 to $74.29.

FULL FRANKLIN 13G FILING