The Iconoclast Investor

My investing idea is one that was featured in Cabot Wealth Advisory back in July.  It has fallen hard since-it made a new low just two weeks ago–but it has some compelling features that will make it a prime candidate for investment when the market turns up.

The company is ReneSola (SOL), a Chinese maker of solar wafers for photovoltaic arrays.  ReneSola used to make complete solar arrays, but decided to specialize in silicon production and slicing, a skill that will serve the company well when the world gets off its back and renews its conversion to solar power.

Sure oil is cheaper now and some of the excess funds that nations used to throw toward solar subsidies have dried up.  But burning oil is still a major pollutant, and global warming doesn’t care whether world economies are in a recession or not.  The momentum toward blue-sky initiatives will get back in gear; you can count on it.

My favorite data about ReneSola is its last five quarterly earnings results, which showed a year-over-year increase in earnings of 25% (Q2 2007), then 40%, 80%, 155%, and, most recently, 280%.  Sales percentage changes have been at least in triple figures for 10 quarters, which is since Q1 2006.

It’s not yet time to buy SOL.  You need to watch the chart for a surge in investor support.  Look for a gap up above 10 on big volume, while keeping an eye on the health of the broader market.  With just 18 institutional investors on board, there’s lots of room for growth.