Solar Stocks Slide as Chinese Economy Appears to Slow

Joel Anderson |

Solar stocks were broadly down on Monday as the entire segment appeared to lose ground. The slip caused the Guggenheim Solar ETF (TAN) to lose 1.56 percent on the day, with losses as high as 4.4 percent in the late morning prior to rebounding before close.

The sell-off appeared to be part of a broad, market-wide slip after news that Chinese manufacturing had slowed again. The flash Markit/HSBC Purchasing Managers' Index (PMI) dropped to 48.1 in March, a sign that manufacturing was shrinking (any reading below 50 demonstrates contraction, while any reading above 50 means growth) and its lowest level in over eight months.

As is typical for the segment, the stocks were mostly trading as a monolith, with a number of different companies sliding.

The Elon Musk-chaired SolarCity  (SCTY) lost 3.8 percent, JA Solar Holdings  (JASO) was down 4.8 percent, Yingli Green Energy (YGE) fell 2.94 percent, Canadian Solar (CSIQ) was off 6.03 percent, and Trina Solar Limited (TSL) was the day’s big loser as it shed 8.85 percent. Industry leader First Solar  (FSLR) , though, managed to buck the trend by gaining 0.65 percent.

The news about Chinese manufacturing would likely affect solar more than other industries as Chinese companies are prominent players and the nation represents an important growth market for the technology.

In addition to the day’s broader sell-off, solar stocks could very well be collectively due for a pull back. The growth for the solar industry has been tremendous over the last two years, with as much solar capacity installed in the United States in the last 18 months as had been cumulatively built prior to that period.

Since finding a bottom in November of 2012 in the midst of a market glutted by cheap Chinese panels, solar stocks have been on a massive bull run that has seen the Guggenheim Solar ETF triple in value since that point. Give this sort of incredible increase in valuation, solar stocks may begin to see a pull-back even as they find success. In short, the market may be determining that its already priced a considerable amount of growth in and the current valuations throughout the industry may be a touch too “sunny.”

If that’s the case, it could mean that 2014, while projected to be a strong year for solar companies, could be a relatively rough one for solar stocks.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 9.45 0.04 0.43 1,158,898
YGE Yingli Green Energy Holding Company Limited ADR 3.15 0.11 3.62 139,997
SCTY SolarCity Corporation n/a n/a n/a 0
JASO JA Solar Holdings Co. Ltd. 5.45 0.32 6.24 620,291
FSLR First Solar Inc. 32.35 2.20 7.30 4,769,824
CSIQ Canadian Solar Inc. 11.79 0.72 6.50 2,217,964
AJGFF Atlantis Jpn Grwth Fd Ord 1.88 0.00 0.00 0


Emerging Growth

IGEN Networks Corp.

iGen Networks Corp is engaged in investing in and managing for growth private high-tech companies that offer products and services in the domains of wireless broadband, software as a service,…

Private Markets


Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…

BioSculpture Technology, Inc.

BioSculpture Technology, Inc. (“BST”) is a commercial-stage medical device manufacturer of liposuction surgical instruments for surgeons. It offers the FDA-cleared Twin Cannula Assisted Liposuction ("TCAL") Airbrush Liposculptor II® controllers, Airbrush®…