Renesolar SOL

Funny stock symbol, but this is one I'd like to highlight. This is a recent IPO trading below its offer price of $13 (currently trading at $10). This one has mainly been kept under the radar. Part of the reason might be that it's already listed on London's AIM exchange prior to the US IPO, so some may regard it as not a "true" IPO. Even when it priced at $13, it was already at a discount to the share price in London. So obviously this is not a hyped company, and has been sold off rather hard. It's important to note that most of the solars have recently been trading like a broken sector (especially after STP's earnings disappointment). The reason why I'm interested in SOL is because it's scheduled to begin producing polysilicon sometime this year, with results of trials coming soon. Polysilicon, as we all know, is as good as gold right now, with prices of over $450/kg. That's why WFR (MEMC Electronic Materials) is holding up very well in this market, they are a major producer of polysilicon with very little competition. Practically none of the other chinese solar companies are currently able to produce their own raw material. Renesolar appears to be focusing its efforts on getting there. However, it's important to note that polysilicon production is an extremely difficult process and requires a great deal of technological expertise in order to produce high grade, useable feedstock. So in all honesty, it's still a longshot for this company to be able to truly succeed in this endeavor. Recouping the cost of building the facilities and engineering will most likely take quite some time. Another similar company hoping to begin polysilicon production is HOKU, and we all know that they are still waiting to finish construction of their facility.

The risks? It could be possible that by the time their operations come on line, the price of polysilicon will already been falling. The industry may not be as "hot" as it is now. There are many other companies working towards production as well, so there's the threat of competition. In addition, they may suffer multiple setbacks before being able to produce quality polysilicon. Also, any further selloff in the solar sector will most likely also affect SOL.

SOL states that sometime in the first quarter, they may be able to begin test production - any announcement could be a possible catalyst for this company. Other than that, the company is profitable and is growing at a rapid clip. This could be one company to keep on the radar.