Continuing the theme of avoiding the stronger sectors and buying some weaker areas, I had almost bought Canadian Solar (CSIQ) just a few weeks ago in the mid $30s - it ramped to low $50s, and a missed opportunity went by the wayside. [Jun 17: Canadian Solar (CSIQ) Raises Guidance]
It has now pulled back 30% from its high of $52 two weeks ago, and this appears to the be the market's current favorite - the only chart I can find in the sector where the stock has not broken the 50 day moving average. This is not my favorite name in the sector fundamentally - a huge amount of their last earnings were nothing more than currency gains - but the market doesn't peek beneath the hood to realize that, so we'll go with the market. And frankly, all that I've gained from buying the names I liked fundamentally are very large losses. So in this one sector, it appears momentum and favoritism mean far more than trying to squirrel out the best values - so you have to buy the "popular kid". Ask Meena Polar (TSL). (it shall not be referred to by it's official name until management begins to act like they care about their investors) That said, when last I checked a few weeks ago Canadian Solar was still the 2nd cheapest in the group (that could of changed since then since many names in this group have lost 30-40% of value)
So with that said, and my style of trying to pick the best fundamentals SLASH value - NOT working in this sector, I'm adopting a "buy a much bigger basket and put less into each name". The other two I've considered are Solarfun Power (SOLF) and LDK Solar (LDK) to add to this basket.
I'm still keeping my 2 very unpopular kids in this sector (added a touch to each in fact as they have been demolished the past few weeks) but simply am going to have a target in mind as to what % of the overall portfolio I want in solar - and stuff multiple companies into that piece of the portfolio. Perhaps I am recreating the wheel and I should just buy the solar ETF but what fun would that be. [Apr 16: A One Stop Shop for Solar - get TAN] Personally I am finding it amusing that with oil at record prices, the solar stocks are being decimated - but I do realize the type of investors who own these names are not really "strong hands". Which is why, while I was tempted to buy them last week, I waited.
Canadian Solar (CSIQ) is sitting just above its 50 day moving average @ $37 which is a similar area to where it has dropped in the past month, multiple times. While I would hope it would hold this level, if the market weakens, it surely won't - as it's the last survivor in the group clinging to this support level. CSIQ is a 1.6% stake in the fund, and the 3 amigos in this group are now 4.1% of the portfolio as a whole (I am considering them "one stock" if you will, not knowing which the market will bless with a 30% move and which will get trashed in the months to come). I still think Meena Polar (TSL) is the best value in the group but apparently I am the only one in America and the portfolio has suffered for it.
Long Canadian Solar, the artist formely known as Trina Solar in fund; long the artist formerly known as Trina Solar in personal account
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