First Solar

I'm the Latest Bagholder

Hey guys! I’ve received some feedback/requests from last weekend’s energy piece and am in the process of writing up some conventional oil and gas names - will have that out this weekend. In the meantime, none of the natural gas names I’m watching are offering any sort of clean entry so here I am playing the waiting game.

Let’s talk about First Solar (FSLR). Yes, actually.

For those unfamiliar, FSLR is the world’s largest thin film photovoltaic (“PV”) solar technology company. The company is headquartered in the US and has multiple manufacturing facilities throughout the country. The balance sheet is relatively clean, with this year’s capex fully funded and requiring no new debt based on their latest earnings. Beyond that, there is nothing but fear, uncertainty and doubt.

Below is the FSLR weekly chart. It looks like absolute death, fully entrenched in value trap territory. Its forward PE is now 7, trading slightly higher than coal producers.

With that said, there is a slight divergence trying to build on the daily chart. The stock is trying to flatline while the MACD turns up.

Flow data on FSLR has perked up in a very peculiar way. When you see put sales like the ones below noted by James Bulltard, it’s useful to actually understand the math. Without even doing exact calcs knowing the premium received, that’s well over $30 million in implied assignment value on each of those put sales. Trades of this size, especially on names this beaten down, do not tend to occur in a vacuum. There’s a decent chance somebody knows something here.

What are the known unknowns for FSLR?

Most importantly, nobody is sure what President Trump is going to do with solar tax credits. Pair that with fear around potential trade war implications with China, and the name just hasn’t been bid all year. It is completely reasonable to see that daily chart and call it a bear flag as it’s been unable to even climb over its 8 day moving average lately.

With all that said, there is a bull case. The “we need to power all of this stuff” theme is still alive and well, despite various names in the AI power basket getting clobbered since DeepSeek. FSLR fits this theme and is disconnected from the AI basket, which I perceive as a positive. Also, very importantly, Vice President Musk is a gigantic fan of solar, even expressing a belief that the sun will power 90% of the planet during last week’s all hands BUY TESLA pump-session.

I tend to be in the camp that FSLR is in “if not here, when” territory and that the option flow is pretty suspicious. President Trump has a true believer in the industry chirping in his ear and may just do what Elon recommends. I took the following structured trade today in small size:

STO Mar26 $130 Puts / BTO Mar26 Mar26 $200 Calls

The trade is for a $14 credit per contract and makes money just as long as FSLR doesn’t die even more over the next year. I’ll take my chances with stops set in the low-mid $120’s.

Later this week - general market update + individual conventional oil names.