Solar Penny Stocks

Let me take you through a thought-experiment as we try to determine the over-all viability of solar penny stocks as an investment vehicle:

Imagine an alien civilization, living on a planet far, far away from Earth. They are a peaceful but very advanced species, living under a foreign sun. How are their homes powered? What is the main source of their power? It’s the sun! Another sun. Or it’s the waves of their oceans, or their wind. But one thing is for sure: as a civilization evolves, it will learn to harness its solar energy: a source of power that won’t run out as long as the planet is habitable at all.

It’s with this in mind, that I feel comfortable buying solar penny stocks, knowing that as money and innovation are invested into the solar energy sector, it will become more and more a supplier of our power.

So, with further ado, here are my takes on a few solar penny stocks:

Evergreen Solar Inc. (ESLR)

This solar penny stock is off 82% from its June ’08 high. So is it a cheap buy, a profit maker? No, I don’t think so. Avoid this penny stock because things don’t look good: Evergreen Solar recently approved another $100 million of shareholder dilution, indicating basically that they are in trouble.

Verdict: Stay away from Evergreen Solar; it’s far from the best.

LDK Solar Co., Ltd. (LDK)

The LDK Solar Company’s stock is down 85% since late August of last year. Another thing to keep in mind is that this is a Chinese solar company. LDK is estimated to have 250% annual compound growth through 2011, and the solar penny stock is trading at less than six times its trailing twelve months earnings.

Verdict: Buy LDK Solar Co.

Canadian Solar Inc. (CSIQ)

I am proud to be featuring our first Canadian penny stock here on this blog. Everyone knows Canada is about as smart as it gets when it comes to the new energy field. I watched Obama meet with the Canadian Prime Minister on the news earlier this year, and I was very impressed with both the realism and the knowledge about green energy projected by the PM.

Oh woops, it looks like this is actually a Chinese company. Hmm… Those Chinese sure are cunning. I wonder if McDonald’s could increase its revenue in China if it renamed itself McChina’s? What about Kentucky Fried China? Or Kentucky Fried Cat?..

Anyway, our last solar penny stock is down almost 90% since June 2008. Let’s try to see what the future holds, and if this stock is a bargain at these levels.

CSIQ is more of your typical penny stock if you want to trade it. It seems to be more subject to strange penny aspects like volatile “day-trading”. Furthermore, Canadian Solar hasn’t made an annual profit since 2005, when it made $3.8 million. I don’t know about you but I’m not about to pay a market cap of $206 million for this solar penny stock, no matter how much I believe in the overall prospects for its industry.

Verdict: Do not buy LDK Solar.

Let’s go make some money on Obama’s clean energy obsession, just like we made money investing in penny stem cell stock after the President lifted the ban, and as always we will continue to probe into the arena of solar penny stocks looking to make you a buck or a few.