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China Solar Stock Implosion A Reminder To Look Under ETF’s Hood
FYI: Many market watchers have warned this year about a highflying Chinese solar stock—Hanergy Thin Film Power Group—and its leading role in popular ways to bet on solar stocks like one Guggenheim ETF.
With respect to solar, I'm solidly in it's favor. I've seen many really neat installations here in Northern CA, especially at a number of wineries which use the roof of their storage areas for the panels. Many of those installations are capable of supplying all of the power that the winery needs during the daytime.
But a word of caution: I've lately noticed a plague of phone solicitation and door-to-door salespeople trying to "sign us up" for some particular "program" or other. When it gets to that stage, the trouble has already started.
@Sven said Something is very fishy with Hanergy. Hanergy not the only funny money valuation on the various Chinese Exchanges. "Hanergy and Goldin Financial Hldgs both...surged more than sixfold in the past 12 months. Across the border in Shenzhen, there are 103 stocks that rallied that much in a year, compared with only four in the former British colony. Among the 1,721 stocks on the Shenzhen Composite Index,only four have declined this year. “Hanergy and Goldin are a good reminder for investors in China,” Ronald Wan, chief executive at Partners Capital International Ltd. said in Hong Kong. “They have a close similarity with many stocks in Shenzhen which have rallied based on speculation rather than fundamentals.” The 103 stocks in the Shenzhen 500 percent club trade at an average 375 times reported earnings, while their average market capitalization has risen to $3.5 billion, according to data compiled by Bloomberg. Many of them recently sold shares for the first time." http://www.bloomberg.com/news/articles/2015-05-22/hanergy-goldin-s-wild-rides-are-nothing-next-to-shenzhen-stocks
@TSP_Transfer, More info on Hanergy. Problem is that this spills over to several ETFs particularly in the solar energy sector. I have a small position on EEMV that is supposely minimal volatility index but contains 1.4% Hanergy. What does it imply for all Chinese stocks (H or A shares and those traded in US markets) since many emerging market indeces such as Vanguard Emerging Markets Stock Index, VEMAX, which has 29% exposure to Chinese stocks? https://google.com/search?q=Hanergy+Investors+Get+Burned&ie=utf-8&oe=utf-8 Click on Barrons links.
Love solar panels but I stay away from solar stocks or etfs that have them. I had solar panels installed in 2010 and have not paid an electric bill since:) We get 300+ days of sun here, a no-brainer.
Comments
But a word of caution: I've lately noticed a plague of phone solicitation and door-to-door salespeople trying to "sign us up" for some particular "program" or other. When it gets to that stage, the trouble has already started.
Financial Time
ft.com/cms/s/2/cea87e76-fedb-11e4-94c8-00144feabdc0.html#slide0
Hanergy not the only funny money valuation on the various Chinese Exchanges.
"Hanergy and Goldin Financial Hldgs both...surged more than sixfold in the past 12 months. Across the border in Shenzhen, there are 103 stocks that rallied that much in a year, compared with only four in the former British colony. Among the 1,721 stocks on the Shenzhen Composite Index,only four have declined this year.
“Hanergy and Goldin are a good reminder for investors in China,” Ronald Wan, chief executive at Partners Capital International Ltd. said in Hong Kong. “They have a close similarity with many stocks in Shenzhen which have rallied based on speculation rather than fundamentals.”
The 103 stocks in the Shenzhen 500 percent club trade at an average 375 times reported earnings, while their average market capitalization has risen to $3.5 billion, according to data compiled by Bloomberg. Many of them recently sold shares for the first time."
http://www.bloomberg.com/news/articles/2015-05-22/hanergy-goldin-s-wild-rides-are-nothing-next-to-shenzhen-stocks
https://google.com/search?q=Hanergy+Investors+Get+Burned&ie=utf-8&oe=utf-8 Click on Barrons links.