Option Trade Increase 
Add More Canadian Solar Inc. (NASDAQ:CSIQ) Calls 
Tuesday, March 22, 2016

**OPTION TRADE: Buy the CSIQ Jul 2016 25.000 call (CSIQ160715C00025000) at approximately $1.20.

By combining with the option trade executed on March 7th, by selling at approximately $2.00 will give a break-even point. After this price is reached, any price above will be profit.

by Ian Harvey

March 22, 2016

Canadian Solar Inc. (NASDAQ: CSIQ), saw its share price increased to $32.00 with a reiteration of an Outperform rating on the stock by analyst, Carter Driscoll from FBR & Co. He weighed in on Canadian Solar and its stock valuation in relation to new company developments. CSIQ announced several exciting developments recently, including the launch of new successful products in target markets such as the U.S., U.K., Brazil, Japan, China, and the Middle East. Further, the company released a next-generation cell and module product, and is currently planning the launch of its Yield Co.

Driscoll doesn’t believe the stock price of the company fully considers the many valuable additions within the company’s development pipeline, the module cost leadership position, and its potential value increase from the Yield Co. launch. The analysts explains, “We believe that Canadian Solar has a road map to maintain its cost leadership position in modules, monetize its large project development pipeline through a Yield Co. launch (or pursue other alternatives), and continue to invest in new technologies that keep the company on the leading edge of the solar equipment supply chain.”

Though there has been some concern by investors regarding CSIQ’s late-stage project pipeline, which fell from 2.5 GW to 2.0 GW, Driscoll assures that there is a reasonable explanation that follows suit. Namely, the analyst mentions the pipeline reduction by project sales, reclassification of Chinese projects from late stage to early stage given the ongoing lack of reimbursement for feed in tariffs, and finally, a revaluation of a project’s MW potential which excluded the estimated tax equity portion. They elaborate claiming that due to these reasons, “Overall, we are not concerned with the slowdown in the late-stage pipeline.”

In regards to whether market conditions will allow the company to launch its Yield Co., Driscoll believes this will be probable, commenting, “Market conditions have recently caused a disruption in Yield Co. economics, but we believe the company has the pipeline to support it and recognizes the long-term value in utilizing the buy-to-hold model.”

At present, all 6 analysts who have recently weighed in on the stock are bullish. The average 12-month price target between these 6 analysts is $33.20, marking a 65% potential upside from current levels.

Conclusion

As previously mentioned Canadian Solar offers good growth prospects at an attractive price. And as such, by adding this option trade losses should be alleviated and profits gained.

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the CSIQ Jul 2016 25.000 call (CSIQ160715C00025000) at approximately $1.20.

By combining with the option trade executed on March 7th, by selling at approximately $2.00 will give a break-even point. After this price is reached, any price above will be profit.

”Success is simple. Do what's right, the right way, at the right time.”

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