As a result, the company was able to register consistent improvement in its bottom line in stark contrast to its silicon cell peers.
Accordingly, we maintain our Buy recommendation on FSLR with a six-month target price of $333. Price appreciation to our near-term valuation target represents 15.6% upside potential.
What would you call your biggest success story among your solar industry coverage this year?
We first put a Buy on Energy Conversion Devices (ENER) back when it was trading around $30 per share. Of course, this was before the latest oil-shock, or whatever one wants to call it.
Energy Conversion's operating segment, United Solar Ovonics, has a total annual production capacity of 118MW [megawatts]. Ongoing expansion plans will increase United Solar's manufacturing capacity to 178MW by the first half of 2009 and to over 300MW per annum by the end of fiscal 2010.
You don't worry that the share price will level-off significantly?
We remain optimistic about the company's long-term potential success in the high growth alternative energy industry, given increased activity in solar power projects, and progress toward sustainable profitability in ENER's current fiscal year 2008.
Any final words on this sector at this time?
The investment outlook for the alternative energy industry is bullish, with significant growth potential over the next 5-10 years. As with any burgeoning industry segment, there will likely continue to be rapid changes within individual names as new technologies continue to evolve, although the longer-term trend is favorable for diversified long-term investors.
Those investors seeking to capitalize on the on-going efforts to reduce both domestic and global dependence upon the dominant oil and natural gas producing regions of the globe may wish to focus on emerging and established firms engaged in wind power, solar/photovoltaic, solar thermal, geo-thermal, hydro, marine and biomass-based energy sources. Dozens of such companies exist within the US and many more internationally, ranging from micro-cap ventures to large-cap multinationals.
Jon Kolb is a senior analyst covering the alternative energy and utilities industries for Zacks Equity Research.
