Joseph Mjelde buying 4 solar energy stocks: LDK Solar, JA Solar, Trina and JinkoSolar (LDK, JASO, TSL, JKS)

Joseph Mjelde has been in active duty military for 22 years and has been continually learning about investing through personal study over the last 20 years or so. Joseph’s investment style is bottom-up, using fundamental analysis to find the best performing companies in an industry. He concentrates on fundamentals (revenue/earnings/cash flow/book value growth) and macroeconomics in an attempt to profit from emerging trends.

On Friday, April 1, Joseph bought four solar energy stocks for his Covestor model High Growth: LDK Solar (NYSE: LDK), JA Solar Holdings (Nasdaq: JASO), Trina Solar (NYSE: TSL), and JinkoSolar (NYSE: JKS).

Here’s how Joseph describes his Covestor model:

The model’s strategy is to focus on growth stocks that exhibit the potential for annualized growth in excess of 20 percent.  Recognizing the fact that past growth is no guarantee of future growth, analysis also focuses on future potential of a company and industry.  When conducting an analysis of a potential investment, past growth could have come from conditions that will not hold in the future.  So, in summary, the model only considers companies that have a.) performed well in the past (consistent revenue, cash flow, and earnings growth of 20 percent or higher) and b.) show significant potential for continued growth due to industry trends, internal product innovation, and highly skilled/competent management.

Barron’s Tiernan Ray had a bullish report for the solar stocks recently, noting two factors from Europe that have contributed to the recent strong price performance in the sector:

The most immediate spur: Regional elections in Germany over the weekend saw a surge in support for the Green party, including in Chancellor Angela Merkel’s conservative heartland of Baden-Wurttemburg. The victory comes amid what seems to be a crescendo in anti-nuclear fervor, with 200,000 people marching in Berlin, Cologne, Hamburg, and Munich, report the Financial Times’s Quentin Peel and Jennifer Thompson, with demands for an immediate shut-down of Germany’s 17 nuclear power plants…

Adding fuel, if you will, to solar’s rise, the hand-wringing over Italy seems to be drawing to a close. With some tentative outlines for a reconciliation over solar energy subsidies in that country last week, Italian industry minister Paolo Romani is expected to offer a final ruling perhaps this week or next, bringing the matter to a close.

As a proxy for the sector, here’s how the solar energy ETF TAN has performed over the past year – pretty much flat:


“Comin’ Up Sunny For Solar: Just About Everything” Tiernan Ray, Barron’s 3/28/11