Real Goods Solar Lacks IPO Punch
Real Goods Solar (RSOL, $7.50, unchanged) made its IPO (initial public offering) debut last week but has failed to “ride the tide” that other Solar energy plays are providing as they breakout to new highs. Real Goods Solar installs residential and small commercial solar energy systems in California and has plans to expand along the West Coast and in New England.
The IPO was priced at the low-end of its $10-$12 range and the stock closed at $8.80 on its first day of trading. Real Goods Solar raised $55 million after offering 5.5 million shares at $10 a share. It is important to note that Real Goods Solar is a subsidiary of Gaiam (GAIA, $15.66, down $0.17) but as a stand-alone company it is already profitable. Only time will tell how well this company will do in the future. Meanwhile, other solar energy plays remain hot:
Canadian Solar (CSIQ, $45.22, up $4.44). I mentioned the company would be announcing earnings on Tuesday and they simply blew Wall Street away. The stock gained 30% yesterday and is up another 11% today after doubling estimates by reporting earnings of $0.61/ share.
Energy Conversion Devices (ENER, $56.18, up $0.98). The company reported earnings last Thursday and is up 20 points since.
First Solar (FSLR, $314.90, up $10.92). The stock is steam-rolling past its previous all-time high of $308 and has traded as high as $317 this morning.
SunPower Corporation (SPWR, $95.54, up $5.54). The stock was trading at 52-week lows in mid-March, hitting the low $50’s. Its been in an uptrend but has a long way to go to get back to its 52-week high of $164.
There’s no doubt that investors are striking while the iron is hot but be careful when chasing these stocks higher. The sector carries some extreme volatility and expectations are getting a little out of hand right now.
Rick Rouse
Rick@OptionsMentoring.com