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Canadian Solar Shatters The Bear Case

Lately there has been much negativity in the solar sector pushing down solar industry valuations to unsustainably low levels. Some of the negativity had to do with declining oil prices which has very little to do with the solar industry. While there has been a minor recovery over the last few days in the solar sector, many solar stocks continue to trade at unjustifiably low levels.

Canadian Solar (CSIQ), in particular, was hard hit with concerns about its overdependence on the Japanese market and the depreciation of the Yen against the dollar. As a sign of madness of Mr. Market, Canadian Solar, even after significant recent gains, is now trading at 6.2x 2014 median estimate of $4.11 and 5.9x 2015 median estimate on $4.30.

Our view, as expressed here and here is that 2015 EPS is likely to be in excess of $6. From our perspective, CSIQ is now trading… Read More …