Dear Trina Solar Limited (ADR) (TSL), I’m Back! – Billionaire Ken Griffin

As solar installations show signs of rebounding, Trina’s aggressively low pricing should help it continue capturing market share. Even with its low-priced products, Trina has managed to maintain its solid operating margin:

Trina, and a number of other solar companies, are trading well below book value, which tends to be a solid valuation metric for the volatile solar industry. On a price to book basis, Trina is quite attractive, trading below top U.S. solar operator First Solar and other major Chinese operators:

First Solar recently saw an upgrade from Citigroup, putting a buy rating on the shares, following news that the solar company had bought the Macho Springs Solar project, a project that will be New Mexico’s largest solar project and power 18,000 homes when complete in 2014. Suntech, on the other hand, has announced stoppage of two of its three production shifts at its Arizona plant, where production costs are now elevated due to tariffs imposed by the U.S. government. LDK Solar is one of the companies still recovering from the 2012 demand decline. The company released guidance that shows 2012 revenue may come in well below estimates. The company expects revenue in the range of $950 million to $1 billion, whereas analyst expectations are at $1.4 billion for 2012.

Don’t be fooled

Trina is down over 65% the last five years, now trading around $5.40 with a sub-$500 million market cap, and although Griffin is taking an interest in the stock, the position is a relatively small one in the grand scope of his $56 billion 13F portfolio (check out other hedge funds owning Trina). Although Trina is well positioned in the industry, the industry itself is still speculative and volatile, as seen by Trina’s 3+ beta, so buyer beware.

The article Dear Trina Solar, I’m Back! – Billionaire Ken Griffin originally appeared on Fool.com and is written by Marshall Hargrave.

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