Again between the April 15 and April 30 settlement dates, short interest in the leading U.S. solar-related stocks continued to shrink.


The retreat by short sellers was especially notable in First Solar, Inc. (NASDAQ: FSLR), Solaredge Technologies Inc (NASDAQ: SEDG) and Vivint Solar Inc (NYSE: VSLR) in the most recent period.


Below is a quick look at how these three stocks have fared recently and what analysts expect from them. That is followed by a glance at short interest moves in other leading solar stocks.


See also: SunPower, First Solar Transitioning To YieldCo


First Solar
Short interest in this Tempe, Arizona-based company shrank more than 8 percent during the period to around 6.61 million shares, or 8.9 percent of the float. That was the smallest number of shares short in at least a year. Note that short interest declined about 10 percent in previous two-week period as well.


First Solar's project with Apple continued to fuel speculation during the period. First Solar has a market capitalization of about $5.6 billion. Its operating margin is better than the industry average, but the return on equity is less than 5 percent. Also, its price-to-earnings (P/E) ratio is less than the industry average.


The consensus recommendation of the analysts polled by Thomson/First Call is to hold shares, and that has been the case for at least three months. Yet their mean price target, or where the analysts see the share price going, is around 13 percent higher than the current share price.


First Solar shares rose only about 1 percent during the short interest period, but it has pulled back almost 9 percent since then. The stock has outperformed the likes of Linear Technology and Sharp over the past six months. It also outperformed the Nasdaq and the S&P 500 in that time.


SolarEdge Technologies
Short interest in this maker of PV solar panel components plunged more than 80 percent to less than 14,000 shares during the period, its third since its initial public offering. That April 30 reading represents far less than 1 percent of the float, and the days to cover was, of course, less than one.


Deutsche Bank initiated coverage on the stock with a Buy rating in the period, citing the Israel-based company's competitive advantage and growth potential. It has a market cap of more than $1 billion. Its operating margin is in the red and the return on equity is less than 3 percent.


As this company only went public quite recently, there are no analyst recommendations listed yet. However, six analysts have price targets, ranging from $34.00 to $40.00. From the most recent close, that suggests upside over the next year in a range of almost none to about 15 percent.


Short sellers watched the stock rise about 4 percent during the short interest period, but it has surged about 31 percent since then, much of that gain in the past week. Since its IPO, SolarEdge shares have outperformed not only the two other stocks featured here, but the broader markets as well.


Vivint Solar
The number of shares sold short in this Utah-based company fell almost 19 percent in the period to around 3.64 million, or less than 18 percent of the float. That was the third period in a row of declining short interest. It would take more than five days to close out all of the short positions.


Announced rule changes in California are expected to benefit Vivint and its competitors. It has a market cap around $1.5 billion. The return on equity is in negative territory. Analysts anticipate net losses in the current quarter, as well as for the full year and next year.


All but one of the five analysts polled recommend buying Vivint shares, with one of them rating the stock at Strong Buy. They see plenty of room for shares to run, as their mean price target indicates more than 25 percent potential upside. That consensus target would be a post-IPO high as well.


The share price rose almost 10 percent during the period. It is now almost 61 percent higher since the beginning of the year and well above the 50-day and 200-day moving averages. Over the past six months, the stock has outperformed First Solar, as well as the S&P 500 and the Nasdaq.


See also: California Drought Stocks To Look At


And Others
Short sellers also fled from Real Goods Solar in the period, while short interest in Advanced Energy Industries, SunEdison, SunPower and TerraForm Power shrank more modestly in the final two weeks of the month.


However, SolarCity bucked the trend with a marginal bump in the number of shares short during the period.


Among foreign-based solar companies, the number of U.S.-listed shares (or ADSs) sold short in Canadian Solar, JA Solar Holdings and Yingli Green Energy also shrank during the period. However, China Sunergy, Hanwha Q CELLS, JinkoSolar, ReneSola and Trina Solar saw gains in their short interest.


At the time of this writing, the author had no position in the mentioned equities.


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