Companies: SOLA   

It is only three weeks on from our last update on solar panel maker ReneSola, and the share price has shot up by a further 65 per cent thanks to a set of stunning first-quarter results. This means that, since we decided to get back on board ReneSola in September last year (when the shares were trading for 265p each) the share price has increased by more than 150 per cent.

The Q1 results, released last week, showed that revenues in the three months to 31 March had increased to $123 million (£62.6 million) – some 28 per cent greater than the previous quarter and a whopping 242 per cent increase on Q1 2007.

The company had also managed to increase its gross margin to 22.1 per cent, compared with 20.4 per cent in Q4 2007, so pre-tax profits for Q1 2008 were 72.2 per cent greater than the previous quarter.

The company anticipates that production output of photovoltaics for the second quarter will be between 75 and 80 megawatts, compared to 66.5 MW in Q1. The gross margin is expected to remain stable.

On Monday the shares closed at an all-time high of 729p. They have come off a bit since that high, but we think the smart thing to do now is take profits.

The shares are currently trading at more than 15 times 2009’s earnings. And although those earnings are expected to keep growing at an astonishing rate, we think that it is prudent to take profits after the recent strong surge in the share price. Gains of 150 per cent in under a year are rare, and it would be foolish not to bank at least some profit. Sell.

ReneSola	AIM	£76.75m	76.75p	-15.25p
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Other company articles:
ReneSola			21/05/2008
ReneSola			02/05/2008
AIM news			28/04/2008
Hanson Westhouse			17/12/2007
Feedstock cheer for ReneSola			22/10/2007