First Solar jumps, 5N follows
As suspected, investors are beginning to hitch Montreal-based 5N Plus’s wagon to the success of First Solar, which busted past analysts’ expectations today by reporting an eightfold increase in profit in its fourth quarter. This news sent First Solar’s shares surging 30 per cent higher today and injected new vigour into a solar market that has taken a beating in recent weeks. Just behind it was 5N, which makes and is the largest supplier of high-purity cadmium telluride for First Solar. This material is a core ingredient to First Solar’s thin-film solar modules, which are benefiting from low-cost manufacturing. 5N saw its shares rocket 18 per cent higher today because of the First Solar news.
Now, some analysts have raised possible concerns that there will be constraints on cadmium telluride resources at some point, but likely not until 2011. They’ve also pointed out that First Solar will, if it’s smart — and by all accounts it appears very smart — begin to find new cadmium telluride suppliers and spread the wealth more equally between them and 5N. That said, there’s nothing stopping 5N from pursuing other solar customers and markets, and even if First Solar does spread the wealth more eventually 5N still stands to grow over time as First Solar’s demands become greater and greater.
Nice to see this Canadian company doing so well just two months after it’s IPO, which was priced at $3. Today the stock broke $10 before settling just under.
Tyler Hamilton is editor-in-chief of Corporate Knights magazine and a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
