Not too long ago I wrote about the solar energy industry and how we are now at the early stages of a major wealth-creating cycle from this sector of the economy. The amount of money that’s being raised on Wall Street for this industry is astounding.
Like many industries with global customers, manufacturing operations for solar energy components are locating where there is abundant, cheap labor. It’s no surprise, then, that the solar energy industry in China is booming. It’s also not surprising that solar energy stocks are booming.
Along with other industries that fall into the alternative energy investment theme, solar energy stocks are perhaps the hottest area of the stock market today. If you are a professional equity speculator, you just have to be trading solar energy stocks.
It is still the early stages in this major stock market trend, but already a lot of newly listed solar energy stocks have appreciated tremendously in price. Take, for example First Solar, Inc. (NASDAQ/FSLR). This stock has more than tripled in value in less than a year. Remember the boom experienced in Internet stocks? A similar trend is taking place in the solar energy industry.
Consider Trina Solar Limited (NYSE/TSL). This stock has tripled in value since the beginning of this year. How about JA Solar Holdings Co. Limited (NASDAQ/JASO)? This stock only listed for trading five months ago. The stock has already more than doubled. How about SunPower Corporation (NASDAQ/SPWR)? This stock’s 52-week trading range is 25-$71 per share. Guess at which end the shares are currently trading. You guessed right. This stock is trading right at its high on heavy volume.
So, within the last year, there’s been a sea of change in the solar energy industry and solar energy stocks. Enormous amounts of speculative money are pouring into this industry — an industry which has been around for decades.
If you are going to be speculating in these stocks, make sure you stick with the established winners. They are all overvalued on the stock market but they are likely to remain overvalued for quite some time. Also, don’t forget your stop/loss limits. With enormous opportunity comes enormous risk.