Early Edge: Canadian Solar Inc., Google, Excel Maritime Carriers Ltd., and Starbucks

              

Today's column includes a fourth-quarter earnings preview from Canadian Solar Inc. (CSIQ), a downgrade for Google Inc. (GOOG), a suspended dividend for Excel Maritime Carriers Ltd. (EXM), and the debut of instant coffee at Starbucks Corporation (SBUX). Each day, Early Edge focuses on the hot stocks in the news and gives you a unique insight into each stock's sentiment backdrop. Our time-tested contrarian approach centers on options, and gives you the trading tools to approach the day with a much-needed edge over the investing herd.

Canadian Solar Inc.

Canadian Solar Inc. (CSIQ: sentiment, chart, options) today pre-announced some of its unaudited financial results for the fourth quarter of 2008. The firm predicted net revenues for the period between $66 million and $71 million, with a quarter-end cash position of $130 million. Analysts are expecting fourth-quarter revenue of $69.28 million. Gross margin for the period is expected to be negative, due to weakness in the euro, a decline in module pricing during December, and an inventory revaluation provision.

Looking ahead, CSIQ noted that it has signed sales contracts worth 262 megawatts, and orders for another 190 MW are "in the near-term pipeline." The company said that demand appears to be strong despite the financial crisis, but added that short-term pressures remain due to "the current credit environment, winter weather in Germany and market-wide inventory clearance efforts."

CSIQ is slated to release its fourth-quarter earnings in full before the market opens on Tuesday, March 17. Analysts, on average, are forecasting a loss of 26 cents per share for the period.

In fact, brokerage firms are resoundingly bearish towards CSIQ. None of the 7 analysts following the stock recommend buying it, and Thomson Reuters places the equity's average 12-month price target at $4.61 -- a 7.8% discount to Friday's closing price. Any upgrades from this group could draw new buying pressure to Canadian Solar.

Google Inc.

Google Inc. (GOOG: sentiment, chart, options) was greeted with an early morning downgrade today, as brokerage firm ThinkEquity lowered its rating on the shares from "accumulate" to "source of funds." In a note to clients, the firm noted GOOG's gain of 27% during the past 3 weeks, compared to a 3% improvement in the S&P 500 Index (SPX) during that time frame. ThinkEquity says the current price reflects a second-half recovery that they think is unlikely to occur.

In fact, the stock's recent rally launched it directly into resistance from its 32-week moving average, which lies near the 380 level. GOOG shied away from this trendline last week, and it's continuing to slide ahead of the open; the shares are down 3% in electronic trading.

If more brokerage firms grow skeptical of the stock's performance, there's ample opportunity for additional downgrades. Zacks reports a whopping 16 "strong buys" and 4 "buys," compared to just 2 "holds" and no "sells."

Excel Maritime Carriers Ltd.

Excel Maritime Carriers Ltd. (EXM: sentiment, chart, options) announced this morning the suspension of its quarterly dividend. The shipping issue said the decision was made "after careful consideration of the challenging conditions both in the freight market and the financial environment."

EXM added that the dividend suspension is "aimed at preserving cash and enhancing liquidity, and is considered to be a precautionary measure in view of the disruptions arising with some of the company's charters."

Ahead of the bell, the shares have swooned more than 16%. Considering its current price near $7, EXM could be hit with price-target cuts from analysts. The average 12-month price target among brokerage firms is $19.53, according to Thomson Reuters, representing a premium of 171% to Friday's close.

Starbucks Corporation

Starbucks Corporation (SBUX: sentiment, chart, options) today will debut its new "Via" instant coffee, priced at under $1 per cup, as its latest salvo in the fight to woo cost-conscious consumers into its stores. Following the drink's launch, the coffee chain next month will begin selling trios of single-serve Via packets for $2.95, with 12-packs priced at $9.95.

While SBUX is facing increased competition from cut-rate rivals such as McDonald's (MCD), some analysts are skeptical as to whether Via can provide the Seattle-based java giant with the edge it needs. Last week, William Blair & Co. analyst Sharon Zackfia told Reuters, "I don't think [Via is] going to move the needle much one way or another."

Option traders also seem skeptical, as these speculative investors have purchased 1.28 puts for every call on SBUX during the past 10 days on the International Securities Exchange (ISE). This negative sentiment is evident ahead of the open, as the stock has dropped 1.2%, and is clinging to its foothold above the round-number 10 level by just 1 penny.

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