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This Stock Is 'Untouchable'

Thursday, 13 Oct 2011 | 6:45 PM ET

It is important investors know the difference between a broken stock and a broken company, Cramer said Thursday.

Sell Block: First Solar
Cramer says First Solar's stock has come down a lot since he first told investors to sell it in September 2010, but it is still not a safe buy and could actually be a value trap; that's when a stock looks cheap but only because the business is in such dire straits.

Take First Solar , for example. Based in Tempe, Ariz., it is both the U.S.'s largest solar power company, as well as the lowest cost producer of solar power. Cramer put FSLR on the "Sell Block" on September 10, 2010 and since then, it's lost nearly 60 percent of its value. Now selling at just 6 times earnings, some investors are wondering whether FSLR has become cheap enough to buy, especially given chatter it could be a takeover candidate.

First Solar's stock may appear ready to bottom, but Cramer thinks it could still go a lot lower. After all, he thinks the solar energy business is in decline. It's long been reliant on government subsidies, which has become increasingly problematic as policymakers are reducing spending and cutting funding to solar energy projects. So long as the solar industry struggles, Cramer thinks FSLR is "untouchable."









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FSLR
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