DQ - Daqo New Energy Remains My Top Pick In The Green Energy Industry
2024-07-09 00:32:16 ET
Summary
- Daqo New Energy's stock price has dropped a lot this year due to weak sentiment in the solar industry and lower polysilicon prices.
- However, the company still has the best balance sheet in the industry and is ready to weather the storm.
- Tier 2 and 3 polysilicon manufacturers are exiting the market, decreasing the overall polysilicon capacity and leaving market share on the table for tier 1 manufacturers.
- Daqo New Energy is valued below their cash position and 0.22x price to book value, indicating severe undervaluation.
- A new buyback program and a tipping point in the solar industry could make this stock still a winner in 2024.
The solar industry has been obliterated in the past months, and fairly so because of incompetent management. One of the largest losers was none other than SolarEdge ( SEDG ), who thought it would be a good idea to throw cash towards buybacks in a very competitive and depressing environment. SolarEdge has neither pricing power nor product differentiation compared to competitors and that is highly visible in their operational performance. Months after doing buybacks, SolarEdge realized the mistake due to insufficient cash and priced a $300M convertible debt offering ....
Daqo New Energy Remains My Top Pick In The Green Energy Industry