Cramer: The Sun’s Setting on Solar Stocks
Hopefully, Cramer helped you to make some mad money last week with his calls on retailers like Kohl’s and JC Penney and the upside surprise in Jack in the Box. Granted, Deere is down, but it deserves to be after less-than-stellar execution, he says. But Sell Block isn’t about praise and accolades – it’s about humility, and knowing when it’s time to leave a stock.
That’s why today’s focus is on the solar sector. Investment banks are flooding the market with these stocks the way they did with ethanol a year ago, and when the pipeline is full, Cramer says, it’s time to sell. It’s so bad that it makes Cramer think of the massive oversupply we saw during the dot-com days.
First Sunpower, a former Mad Money favorite, offered 7.5 million shares, with more behind it to be sold by parent Cypress Semiconductor. Tuesday, Evergreen Solar put up 15 million shares. Today, there’s a lock-up expiration in First Solar worth 40 million shares. And there are four solar IPOs still to come: China Solar (8 million shares), GT Solar (undetermined number), Yingli Green Energy (also undetermined) and LDK Solar (17 million).
Basic supply and demand should mean the prices on these stocks are going to drop. There’s just too much flooding the market, Cramer says, so he thinks it’s probably a good idea to sell everything solar right now.
Bottom Line: Cramer believes this group has become too dangerous to own. In fact, the only one he thinks is worth owning – and it may shock you – it's coming right up after the Lightning Round.
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