Reiterating Potash Corp. Buy; Recommending First Solar

Something happened this past week that is significant. Not only was there positive action from the Federal Reserve and the markets moved higher in reaction to that but all three major indexes showed a buy signal for the first time this year. In addition the new highs (stocks that are making a new 52-week high) vs. new lows (stocks dropping to a new 52-week low) was above one in a fractional sense. These are both very good technical indicators for the market going forward

With new optimism for the market recovering based upon the above indicators, I am reiterating a call for Potash Corp. (POT) from last week and adding First Solar (FSLR) for this coming week. Potash hit a new 52-week high on Friday with a 2% gain to finish the week 6.5% higher. Analysts are predicting more strength in earnings going forward with very bullish calls of 7.92 EPS in the current year and 9.91 next year up from 5.54 and 6.61 respectively, just 90 days ago. The stock has a trailing P/E ratio of 50 with revenue growth (year over year) of 42% and EPS growth (yoy) of 103%.

First Solar has been a great company to own in the last year and could be headed for another great year of returns for investors. Also running to a new 52-week high on Friday up 10.5% for the day, First Solar has solid earnings estimates and an acceptable P/E at its current prices. A trailing P/E of 136 seem steep but knock-out quarterly revenue growth of 281% (yoy) and quarterly earnings growth of 682% (yoy) put its high trailing P/E into perspective. One might want to wait for a pullback to purchase First Solar as the big gain on Friday could consolidate a little bit before the stock moves higher.