STR Holdings Shares Plunged: What You Need to Know
Sat, 13/11/2010 - 12:09 by Travis Hoium
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis. What: STR Holdings (NYSE: STRI) shares fell as much as 20% after the company released earnings today.
Adjusted earnings came in at $0.39 per share above the estimate of $0.37, but it wasn't enough for investors. STR expects margins to fall over time, and investors think this could be the tipping point.
Now what: As solar manufacturers like JA Solar (Nasdaq: JASO) and Solarfun (Nasdaq:SOLF) see margin pressures due to falling subsidies, they will place pressure on suppliers to lower costs. This leaves STR in a tough spot going forward even though the solar industry is growing quickly. I'm going to sit out this drop and look elsewhere for value in the solar market today.
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