Sunrise or Sunset for Solar Power?

As we know, part of Obama's stimulus plans are to fund alternative energy. China has recently been doing the same. Of the alternatives, I have been interested in solar and to a lesser degree wind.

This week Barrons had an article on the fall in solar panel pricing...

"Cheaper solar silicon is of course a great thing for the planet's living creatures. But solar companies and investors who planned for silicon that was scarce and high-priced must adjust their business models for a glut that looms larger than most anyone expected. New government subsidies will help in the U.S. and in China, which energized solar stocks last week with a plan to help China's struggling photovoltaic industry. Lower prices will also stimulate sales volumes as solar panels become cost-competitive with fossil-fueled power. The question is whether solar energy's volume producers will end up resembling the high-margined Intel or the profitless memory-chip makers." Full article HERE[$].

So perhaps a bad time to get into solar? Or not?

I continue to use the Greenblatt value filter to look for likely stock candidates. Back on March 16 I noticed that GT Solar (SOLR) showed up on the Greenblatt filter so I made an investment.

GT Solar does not make solar cells. Rather it makes the equipment that makes the solar cells. As has been said elsewhere, the ones who made the money in the gold rush of 1849 were not the miners but rather the merchants who sold the miners the picks and the shovels. That's GT Solar's business.

It is up 72.9% in the two weeks since I bought it on March 16. This compares with the Total Stock Market being up 8.4% over the same period. And even today while the market was down 3.6%, SOLR was up another 1.6%. Daily trading volume over the last three months was 800K shares. But over the last few days trading volume has rocketed. Today its volume was over 6M shares.

I think I'll put in a stop loss.

BTW, on March 16 I also saw Lilly (LLY) listed on the Greenblatt value filter. Furthermore it pays a 5.8% dividend. So I bought in. It is only up 3.9% compared to the Total Stock Markets 8.4%.