New Life in Solar Stocks

Positive analyst comments from Cowen & Company today pushed solar stocks higher. The firm reiterated its outperform rating on several solar companies, including some Chinese solar companies (*):

Energy Conversion (ENER), Evergreen Solar (ESLR), First Solar (FSLR), Hoku Scientific (HOKU), SunPower (SPWR), Suntech Power (STP)*, and Trina Solar (TSL)*.

Analyst Rob Stone said legislation in the U.S. to extend tax credits for renewable energy may be introduced in the Senate on April 22nd this year with a better chance for passage. He also noted that concerns about the supply of silicon should subside in the second half of the year with more output from new plants and more settled prices. Political support for renewable energy should continue in Spain as well as in Germany, two important long-term markets for solar power.

Focus Media Included on NASDAQ 100, Considering Multi-Billion Assets Strategy for '08

With recently renewed interest in the stock by analysts and the business media, Focus Media (FMCN) has also won a spot from its growth on the NASDAQ 100 index. The change takes effect on Dec. 24. FMCN and several other stocks replace XM Satellite Radio, Ericsson and others currently in the index. Focus Media has done well on the NASDAQ over the period of the last few weeks. The stock closed up about 3% yesterday and another 1% today to $57. The average analyst target is currently around $63, and the price-earnings ratio is about 52.

Also, Focus Media is exploring a possible carve-out of two of its higher-growth units. The public offering would be in the first-half of 08, TheStreet.com reports, although it has not been determined where shares would be traded. The two units are Internet advertising and wireless advertising. Analysts estimate that Focus Media’s Internet advertising business could be sold for (US$) $4 - $6 billion, and about $1.7 billion for the wireless advertising portion.

Yahoo Gets Benefits from Alibaba- But is Now the Time to Buy?

Think about what's coming up for Yahoo. You have Google with its foray in wireless, and Amazon's squeeze on business-to-consumer and consumer-to-consumer shopping. Yahoo may get a short-term bump from Alibaba's IPO success, but fundamentally, Yahoo is being valued in terms of a price/earnings ratio close to Google. I think Yahoo still needs to provide a clearer strategy for positioning itself in the minds of search and commerce Internet users. Yahoo is making progress in advertising in terms of strategy, but how will it position itself to stay in (or return to) users' most favored sites? In the meantime, Alibaba shows the demand for companies that have potential to continue leading in their markets and grow revenue and profits. Alibaba has a lot of potential, and so do other Chinese companies in growth industries. There are large international markets for alternative energy, financial services (when concerns about US subprime subside), and media.

New CBS/New York Times poll on Chinese imports

It's a hot topic of conversation and in case you missed it, CBS News and NYTimes conducted a poll after the recent recalls to see how they affected the public's views on imported goods from China. The poll was taken between Oct. 12-16. The poll is on imported goods, not goods sold in China. 14 percent of Americans have stopped buying goods from China, and 7 percent have stopped buying some items. Although, 9 percent said they don't normally buy goods from China. Older Americans were more likely not to buy.

The poll also found that 41 percent of Americans think the quality of Chinese products are at least good (11 percent said excellent). 36 percent said fair. 20 percent said poor.

Chinese producers still have a ways to go in selling their products in the US market. Although sales volumes of imports from China have been good at US retailers, producers need to understand the US market better.

The poll does show, however, that the recent spate of recalls hasn't dented American attitudes much toward goods from China. The Times says that the poll results haven't differed much from past polls in 1991 and 2000.

Earnings & Coffee Time

With earnings season underway, both for US and Chinese companies, what I as an investor will be seeking is direction on how various companies plan to grow their business and assess their stock values. Some companies are very reasonably valued, others I definitely would like more info on. That's why I look forward to earnings seasons, aside from the possibility that a company or companies may beat analyst expectations. What I find a lot of companies, US and Chinese companies, could work on is beating investor expectations in terms of discussing their strategic direction.

As an example, last year I was listening to the webcast of the earnings release by Starbucks, a company that has a growing presence in China. I have to say that as an investor, I wasn't expecting a lot in terms of the company discussing its plans- most companies it seems don't go into much detail. But I was surprised by what I heard. Starbucks' presentation went into detail about its plans for China as well as the US and other countries. One of Starbucks' high level managers in China presented and expressed his view on market conditions and market acceptance for the brand and for coffee.

I'm hoping other companies will do as Starbucks did. Note- I'm not a current investor in Starbucks, but I use its example as just that, hoping that this earnings season will produce good info for investors as well as the analysts.