Solarworld AG (SWV) had the biggest five- day advance in Frankfurt trading since 2008 after Warren Buffett agreed to invest as much as $2.5 billion in two solar projects and as new installations in the country reached a record.
Germany’s biggest solar-panel maker has climbed as much as 52 percent since Dec. 27, the steepest jump for five trading days on an intraday basis since Nov. 5, 2008. The stock rose 9.7 percent to 1.53 euros at 12:11 p.m. in Frankfurt, with trading volume of more than four times the three-month daily average.
The shares are benefiting from Buffett’s vote of confidence in the industry, said Erkan Aycicek, an analyst at Landesbank Baden-Wuerttemberg AG. Buffett’s MidAmerican Energy Holdings Co. agreed to a deal for two California projects that are set to be the world’s largest photovoltaic development, according to a statement on Jan. 2. Germany, the biggest solar market by installed capacity, may have added a record 7,634 megawatts of capacity last year, according to the country’s grid regulator.
“The healthy 2012 installation numbers in Germany may be another reason to be more optimistic, as Solarworld is traditionally strong at home,” Aycicek said today by phone. “Many investors have shorted the stock and now have to cover that.”
Still, while solar power performed well in Germany in the fourth quarter, which was the first to reflect the latest reductions in subsidies, Solarworld has struggled in its home market recently, said Stefan Freudenreich, an analyst at Equinet Bank AG, who recommends selling the shares.
Solarworld, which led a group of manufacturers in a complaint against unfair competition from Chinese companies, expects the EU to announce anti-dumping duties as early as May, Chief Executive Officer Frank Asbeck said last week.
“From a strict operative viewpoint, there’s no reason why the stock should be surging,” Freudenreich said by phone. “While it may be a bet on anti-dumping tariffs against Chinese rivals in the European Union, which would definitely help Solarworld, I’m pessimistic that the EU will take that step.”
Fifteen analysts surveyed by Bloomberg have the equivalent of sell recommendations on the stock and five recommend holding the shares.
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