I have, on many occasions here, recommended First Solar (FSLR) as a buy, and yesterday’s earnings release confirmed that view once again. For the second quarter in a row they didn’t just beat street expectations, they shattered them, reporting EPS of $1.95 versus a consensus forecast of $0.84 fueled by sixty percent year-on-year revenue growth. If you took my advice and are long the stock, that is obviously good news, but what should really get you excited is the story behind those blowout results.
The base case for owning solar power stocks in general is well documented, but worth repeating. Even the most die-hard traditional energy investor should by now recognize one thing; alternative energy, and solar power in particular, is neither a fad nor at an inherent cost disadvantage. Solar arrays are producing a growing amount of consistent, cheap electricity all over the world, and will continue to do so whatever politicians may say. Here in the U.S. we have about as pro-fossil fuel an administration as one can imagine in DC, but on a state and local level, alternatives dominate.
That doesn’t mean, however, that every solar stock is a buy. Solar power may not be at a noticeable cost disadvantage any more, but it was for many years. That, combined with a massive, heavily subsidized ramping up of solar panel production in China, left many companies in the industry struggling and weighed down with debt. FSLR, however, is different. They have just over…
