Solar Power Stocks to Watch: Cypress (CY) & Solar Power (SPWR)
Oct. 19, 2007 by AskAME.com
Cypress Semiconductor has been outperforming the S&P 500 for months now and has been hitting new highs while other stocks in the chip making sector have been flat lining.
Upon investigating the source of the price imbalance AskAME.com discovered that the secret was a solar panel chip technology company, publicly traded, of which Cypress is a majority owner. Furthermore that little solar company reported earnings yesterday and it is up over 250% year-over-year.
Here are the Fidelity & Charles Schwab (exactly the same) description of CY, “Cypress Semiconductor Corporation (CY) provides silicon-based products andsolutions. It offers programmablesystem-on-chip (PSoC) products, universal
serial bus (USB) controllers, wirelessUSB, programmable clocks, and RoboClock family of clock buffers, as well as programmable-radio-on-a-chips.”
TDAmeritrade sheds a little light on this stock’s more direct solar connection, “Cypress Semiconductor Corporation (Cypress) delivers mixed-signal, programmable solutions. The Company’s offerings include the programmable system-on-chip products, universal serial bus controllers, general-purpose programmable clocks and memories. It also offers wired and wireless connectivity solutions. It serves numerous markets, including consumer, computation, data communications, industrial and, through its subsidiary SunPower Corporation (SunPower), solar power. It operates in five business segments: Consumer and Computation Division, Data Communications Division, Memory and Imaging Division, SunPower and Other. During the fiscal year ended January 1, 2006 (fiscal 2005), it acquired SMaL Camera Technologies, Inc. and also acquired Cypress MicroSystems. In March 2007, it completed the sale of its Silicon Valley Technology Center, to Oak Hill Capital Partners and Tallwood Venture Capital. During fiscal 2007, SunPower completed the acquisition of PowerLight Corporation.”
Aside from the obvious silicon chip manufacturing angle (photovoltaic solar panels are made of specialized silicon chips) Cypress has been ahead of the curve on solar energy by purchasing or spinning off SunPower Corporation (Nasdaq: SPWR).
SunPower Corporation engages in the design, development, manufacture, and
marketing of solar electric power products primarily in the United States, Germany,and Asia.
This little gem released their quarterly report Oct. 18th, 2007. Here are the highlights:
* Q3 2007 revenue of $234.3 million, up 258.6 percent year on year – 466-megawatt solar cell Fab 2 dedicated and production ramping on first two lines
* Achieved 20.1 percent efficiency world record for mass produced solar panel
* $24.7 million, three-year Solar American Initiative agreement signed with U.S. Department of Energy
* Dedication of first of 28 Macy’s solar electric systems in California – 18-megawatt Olivenza Spanish solar power plant order booked in October
Todays pullback in the markets provides a buying opportunity for both stocks. CY and SPWR are were both trading at 52 week highs yesterday. I suspect the solar connection is what has propelled CY above other semiconductor makers catagorized along with it. This incorrect analogy creates an informational imbalance that suggests Cypress will continue to be a low risk high reward stock pick.
SPWR certainly represents a higher risk with a much lower capitalization than its parent company, however it has proven itself to be a highly profitable company with tremendous upside should the cost of traditional sources of energy remain high or continue to climb.
Semiconductor makers as a group have moved sideways over the same period of Cypress Semiconductors meteoric rise.
Note below how the Cypress Semiconductor price has climbed…
…virtually in tandem with its subsidiary Sun Power (which went public in late 2005).
Click To Enlarge Chart.


