Shares digital

Solar Integrated Technologies (SIT:AIM) 90.5p

Enthusiasm around this Aim-listed producer of solar roofing systems saw the shares go through the roof in 2006 topping 360p, but supply constraints meant the price tanked afterwards. Last year the shares were wobbly too but the company should come of age now after a recent change in management and final results that show worries can be put aside.

Revenues grew 112% to $81.1 million, gross margins were up 144% to 17.8% and at the EBITDA level the company is profitable. Growth should continue in Europe and in US and tax advantages will boost the solar roofing market further this year. The company gave guidance of 70% to 100% growth in revenue for this year, and guidance last year has been largely exceeded.

In terms of supply problems, SIT does not source its raw materials from the silicon market, which is jammed, and this means delivering the contracts should be easier for SIT than other companies in the solar sector. House broker KBC Peel Hunt has a 173p price target. Positive sentiment after this update should be reflected in the share price, so we suggest buying the shares at the current levels to secure returns in the medium term.

ACTION: BUY Solar Integrated Technologies • Target 100p • Stop Loss 85p

TIME TARGET: 8 WEEKS