First Solar (FSLR) is one of the three companies I keep very close track of. The other two are Apple and FedEx. I focus only on such a small number because I do not have an army of analysts at my disposal. I try to choose significant companies and only replace them rarely.
FSLR is due to report today for Q3, ending September 2010. Here is an analysis of its sales growth rates compared to year ago levels:
Usually the sales growth slowdown by about 50% signals trouble ahead, like earnings disappointment. Notice how, starting from 2008 and until the current quarter, the growth rates dropped by at least 50%. No wonder the stock hasn't been doing great during this period:
FSLR chart, 2008 - today
The values for q3 (green) and q4 (red) are estimates from Yahoo Finance. Q3 is estimated to grow at a good rate compared to q3 last year but in q4 2010 the company is expected to register a drop in sales compared to q4 2009! That is a clear red flag and it makes FSLR a good candidate for a bearish portfolio.
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