Chinese Solar Stocks Make Chop Suey Out of Investors Again

Investors in Chinese solar companies got chopped up and thrown into the frying pan on Tuesday. And not for the first time or the last time. Seasoned speculators who jumped in after many investors had run for their lives were beaming by Wednesday. One analyst says investors who have been in the Chinese solar market for a while should be used to the yo-yoing. And if they have not learned how to profit from it, they should have at least learned by now that the solar world does not come to an end with one release. "Every quarter seems to be the end of the world for Chinese solar companies," says a Frankfurt-based analyst who wishes to remain anonymous and goes by the moniker The Renewable Man. "Trina TSL comes out and lowers second-quarter gross margin guidance and the sky falls down." Shares of leading Chinese solar manufacturers, such as Trina Solar, JinkoSolar JKS, LDK Solar LDK, and ReneSola SOL were all down sharply on Tuesday but rebounded on Wednesday or were well above their lows. "Usually, when the world ends, it's a good time to rebuild and that usually holds true for rebuilding positions in shares of companies. As I said the last time I spoke to Benzinga, history might not repeat but it sure does rhyme when it comes to Chinese solar companies and the reporting of earnings," says The Renewable Man. "I was specifically talking about Jinko the last time, but any of the leading players can set off the bomb. What's difficult is to not become myopic. Solar is where computers were in the 70s," the analyst says. "Solar is learning to stand on its own feet and when it stumbles, it can really hurt." The Renewable Man says trying to trade Chinese solar companies is definitely not for amateurs. Though JinkoSolar's share price is up approximately 30% year-to-date, many of the other Chinese solar manufacturers are down over 10% in 2011.