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The aftermath of the “correction”

March 11th, 2007 · No Comments

So it’s been a long while since I last commented on the stock market. And as you all very well know, the market over the last two weeks has been unpleasant to say the least.

Solar Energy - Can’t keep a hot sector down
STP, FSLR, TSL

Solar energy shares took a massive hit with the market downslide. The China association of many of these companies didn’t help. Suntech Power (NYSE: STP) slid 20%, as did First Solar (Nasdaq: FSLR). However, the profitability of these companies, coupled with the continued emphasis on alternative energy has helped these companies to rebound strongly in just the last few days. Suntech Power is back where it started at 39. First Solar smashed through another all time high at 54 on Friday. Even Trina Solar (NYSE: TSL) performed well on Friday up over 11%. Of course, the valuations of these solar companies are all over the place, and some are a bit overvalued. My favorite of the group remains Suntech Power. The company is due to release its earnings tomorrow. Shares have risen over 57% since it was first recommended on this site.

Internet Stocks - And there were winners …and losers.

Of no surprise, 24/7 Real Media (Nasdaq: TFSM) once again disappointed on earnings. Promising overseas story, but as always, disappointing on the earnings front. Investors should take heart. It has been this way for years. The company is forecasting profitability on an earnings front for this fiscal year…several years after everyone else. Don’t get me wrong, I love the stock, and the shares I own are quite profitable. But it has been a rocky road to say the least. The true winners include Aquantive (Nasdaq: AQNT) and Valueclick (Nasdaq: VCLK). Especially Valueclick. The stock has been on a constant upswing after being included in the S&P, as well as blasting through earnings projections. Although the stock is down about 15% from its highs, it is sitting above its support of 25-26. Surprisingly, Mamma.com (Nasdaq: MAMA) actually reported a profit. Shares seem to have stabilized in the $5 range. That’s a good 400%+ gain since October 2006

And when you combine “China” with “dot com”

Shares of China’s dot com corporations also took a huge hit during the recent down turn. Sina (Nasdaq: SINA) and The9 Ltd. (Nasdaq: NCTY) saw shares fall 15-20%. Sohu (Nasdaq: SOHU) also took a similar sized hit, and is now actually trading near 52 week lows. Perhaps the most interesting company is Tom Online (Nasdaq: TOMO) which was halted on March 5 on news that it may be taken private by its majority shareholder Tom Group. Talk about impeccable timing. The announcement was made at the bottom of the Chinese share plunge. Had the announcement been made even a day or two later, the “premium” for the buy out would seem much smaller. It remains to be seen if and when the take over will occur, as shares have been halted for an entire week, with no perceivable end in sight. The company was taken public just 2 years ago at $15 a share. As a whole, I remain bullish on the sector.

Energy

Oil prices are once again on the rise, over $60/barrel. Yet the major oil companies are 10% below their peak. As the summer months begin revving up, oil demand will once again pick up…and gasoline prices will dominate the headlines once again. Exxonmobil (NYSE: XOM) is currently around the $70-71 mark, and may be worth considering in this price range

Tags: Stocks