Short Sellers Fighting Trends in Solar Power

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It is no secret that the solar energy stocks have been on fire in 2013. In fact, they have been one of the best groups for investors this year. 24/7 Wall St. wanted to see how short sellers are treating these companies after such monumental gains and after seeing higher guidance from some of the key companies. We have opted to exclude the controversial Chinese solar stocks to focus on the U.S. names.

We recently noted that it may be time for a reality check on some of these stocks, with the names being compared to the bubble of 2007 to 2008, but so far the solar bulls are winning as these stocks remain strong with most close to 52-week highs.

First Solar Inc. (NASDAQ: FSLR) is the king of solar, and its shares are up almost 70% so far in 2013. The short interest rose by about 7% to 18.288 million shares, versus 17.07 million at the end of April. While higher than the average for the past three months, this is still well under the levels of 2012.

GT Advanced Technologies Inc. (NASDAQ: GTAT) saw its short interest rise to 44.975 million shares in mid-May. While this gain is about 9% from the end of April, this does represent the largest reading in more than a year.

MEMC Electronic Materials Inc. (NYSE: WFR) witnessed a large uptick in the short selling activity, as the mid-May short interest was 19.325 million shares. This is up almost 15% from the 16.8798 million shares short at the end of April. We did notice that the days to cover fell to 2.12 days, versus 2.96 days in the prior report.

Real Goods Solar Inc. (NASDAQ: RSOL) is up tenfold in price from its 52-week lows, and was more than 300% higher so far in 2013, without even considering the higher share prices on Tuesday. Its short interest was hardly worth noting, at 94,410 shares as of mid-May.

SolarCity Corp. (NASDAQ: SCTY) is seeing the short sellers maintain a fight against the grain, although there was a marginal drop in the short interest. Mid-May showed 3.346 million shares short, versus 3.581 million shares short at the end of April and 3.474 million shares short in mid-April. That is still very elevated compared to prior readings, and the issue here is that there may not be much supply of shares to short yet, as this has only been public for a little more than a half of a year.

SunPower Corp. (NASDAQ: SPWR) saw a big gain in the short interest to 11.855 million shares in mid-May. That is up a sharp 24% from the 9.52 million shares short at the end of April, and it represents the largest reading in well over a year. To put this in perspective, the last reading was also the highest reading in more than a year.