Stock Market Watch

RSOL Continues To Bring The Heat

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Shares of Real Goods Solar Inc. (NASDAQ: RSOL), a solar energy company, have seen a sharp rise in trading today after the Louisville, Colorado-based company announced that it will power 18 Stockton Unified School District (SUSD) schools and facilities with solar energy.

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The solar energy will be provided by Real Goods Solar’s commercial and utility division, RGS Energy, in conjunction with Smart Energy Capital (SEC), a leader in the financing and development of solar energy projects for commercial, government and utility customers.

RGS Energy and SEC will provide Stockton Unified School District with 5.1 megawatts (MW) of solar power. By going solar, SUSD will be able to reduce its energy costs.

Commenting on the development, Kam Mofid, CEO of Real Goods Solar, said that the company has successfully deployed its solar energy systems at many schools and academic institutions and is always impressed by the great value proposition that solar brings to the educational sector in particular.

The project is expected to be completed in 2013 and 2014, and is valued at $20 million.

The project highlights the significant shift toward solar energy. This shift was highlighted by Real Goods Solar’s operating performance in the fourth quarter and full year 2012.

During the fourth quarter of 2012, Real Goods Solar completed over 7 MW of residential and commercial projects, which took the company’s total installations for 2012 to over 26 MW in 2012. In addition, the company also secured more than 6 MW of new commercial projects in the fourth quarter.

For the fourth quarter ended December 31, 2012, Real Goods Solar reported net revenue of $26.8 million, compared to $40.3 million reported for the same period in the previous year. The decline in revenue was partly due to direct supplying to customers by financing companies of certain components used in residential installation. The company reported an operating loss of $3.3 million for the fourth quarter of 2012, compared to an operating income of $0.2 million reported for the same period in the previous year. Net loss for the fourth quarter stood at $3.8 million, or $0.14 per share, compared to net income of $0.1 million, or $0.00 per share reported for the same period in the previous year.

At the end of the fourth quarter of 2012, Real Goods Solar had $10.4 million in cash on its balance sheet.
Mofid noted that although 2012 was a challenging year, the company overcame these challenges and achieved major improvements in the fourth quarter that set stage for 2013.

Investors certainly agree with Mofid as the company’s shares have gained more than 163% in 2013. In today’s trading, the stock is up more than 26% to $2.04 on above average volume of 886,257. RSOL shares have crossed their 50-day moving average as a result of the rally today. This is a strong bullish signal. The stock could continue to rise before facing resistance at around $2.60.

Real Goods Solar has been making significant progress, which was highlighted by the company’s fourth-quarter results. The company is well-positioned to benefit from a shift to solar energy. All these make RSOL a stock to watch.

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Jeff Williams (Top Stock Picks)
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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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