Editor's Note

The 25% tariff on Chinese solar products is positive for North American companies. Solar is rapidly becoming mainstream as the costs come down. Now that Chinese companies can no longer dump inferior panels in the U.S. the quality manufacturers in North America should prosper.


New positions are only added on Wednesday and Saturday except in special circumstances.


CSIQ - Canadian Solar - Company Description

Canadian Solar Inc., together with its subsidiaries, designs, develops, manufactures, and sells solar ingots, wafers, cells, modules, and other solar power products primarily under the Canadian Solar brand name. The company operates through two segments, Module and System Solutions, and Energy. Its products include various solar modules that are used in residential, commercial, and industrial solar power generation systems. The company also provides specialty solar products consisting of Andes Solar Home System, an off-grid solar system that provides an economical source of electricity to homes and communities without access to grid; and Maple Solar System, a clean energy solution for families, as well as solar system kits, which are a ready-to-install packages that consist inverters, racking systems, and other accessories. In addition, it develops, builds, and sells solar power projects; performs engineering, procurement, and construction (EPC) work for solar power projects; and offers operation and maintenance services that include inspection, repair, and replacement of plant equipment, site management, and administrative support services. Further, the company generates and sells electricity through its solar plants with an aggregate capacity of approximately 1,211.1 megawatts. Canadian Solar Inc. offers its products to distributors, system integrators, project developers, and installers/EPC companies. The company has operations in North America, South America, Europe, Africa, the Middle East, Australia, and Asia. Canadian Solar Inc. was founded in 2001 and is based in Guelph, Canada. Company description from FinViz.com.

They posted Q1 earnings of 72 cents that blew away estimates of of 38 cents. This wa sup from a loss of 23 cents in the year ago quarter. Revenue of $1.42 billion also beat estimates for $1.38 billion. That was up from $680 million in the year ago quarter.

Solar shipments of 1.374 gigawatts (GW) beat guidance for 1.30-1.35 GW. Their subsidiary Recurrent Energy completed the sale of three solar power plants totaling 544 megawatts to KEPCO, South Korea's largest electric utility.

For Q2 they expect shipments in the range of 1.5-1.6 GW with revenues in the $690-$730 million range and gross margin of 20-22%.

In early June, China cut subsidies to solar providers for regular solar projects. Shares fell $5 on the news. However, now with the 25% tariffs on Chinese panels their business in other countries will more than compensate for the subsidy cut. Shares are rebounding and closed at a 5-week high on Friday.

Earnings August 15th.

Buy CSIQ shares, currently $12.75, stop loss $12.05.
Alternate position: Buy October $14 call, currently 85 cents, stop loss $11.65.


No New Bearish Plays