Nov. 18, 2009 (Chinavestor) We have been upbeat about the Chinese solar sector for quite some time. First, the oversold indicator picked up the sector. As we noted in the Nervous China Stocks on November 3,
"A relatively high number of Chinese solar stocks still remain on the most oversold stock screen. Suntech Power (NYSE:STP) is one of the industry leaders and a technical weakness is a signal to buy. Smaller players might offer fast returns, Canadian Solar (NASDAQ:CSIQ) and China Sunergy (NASDAQ:CSUN) are bargains at this moment."
As the following Google Finance screen testifies, following this free advice gave investors 20.4%, 37.9% and 14.6% return, respectively.
Then we wrote in the Chinese solar sector surprise, right when earnings started to come out, that "With a slew of solar earnings ahead of us this month, this might be a good time to enter the sector."
So for us the better-then-expected revenue and earnings growth of Solarfun Holdings (NASDAQ:SOLF) this morning was really not as much of a surprise. The mismatch between stock prices and profitability of the sector is still present, suggesting more upside for SOLF and the rest of the solar sector.
We have been advising Chinavestor clients to take positions within the sector long time ago. We have one solar stock in each of the Conservative and Growth portfolios right now. Additionally, we have just advised Advanced members to buy LDK Solar (NYSE:LDK) last Friday at 3:30 at $6.32. The stock is up 16% just in the last three days!
We're going to get more visibility after Suntech Power (NYSE:STP) and Trina Solar (NYSE:TSL) but one thing is for sure. The China solar sector surprise is here. Enjoy the ride, intelligent investor!
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