Judging just from the First Solar, Inc. (NASDAQ:FSLR) chart, the lights have gone out. Shares of FSLR stock have lost over 50% of their value over the past year. It has tanked from a high of $69 in March, 2016, to under $28 today.

With last week’s fresh decline, the stock hit deeply oversold levels, trading back to levels last seen four years ago.

The bear case seems obvious. The Donald Trump presidency is unlikely to be good for solar firms. Expect many subsidies to go away. First Solar has lost money for quite a few quarters now, and many analysts don’t see the firm returning to profitability for a long time.

However, you can argue that the negative sentiment for FSLR stock is reaching a crescendo. Lost in the excitement are some real positives that could power a speedy recovery for First Solar shares.

FSLR Stock Cons

Trump Concerns: There is no getting around this one. President Trump is not likely to be a friend of the solar industry. In his recent book Crippled America, Trump suggested that renewable energy was a “bad investment.” He also previously hypothesized that climate change was a conspiracy designed to hurt American business, among other comments that read badly for alternative energy.

Since taking office, Trump has not shown reason to suspect his views have moderated. His Environmental Protection Agency pick is notably skeptical of climate change. Furthermore, recently Trump unveiled a climate-focused executive order. This order will roll back much of Obama’s climate policies, while removing some pollution restrictions from coal power plants.

EPA Cuts: Those generalized Trump concerns have converted into more tangible fiscal fears recently. The first proposed Trump budget would slash funding to the EPA, and cut back many solar programs. On the whole, the EPA is looking at losing close to a third of its budget.

More specifically, the Advanced Research Projects Agency could lose close to $400 million in funding. This agency is responsible for providing money to support alternative energy research that the private sector might pass over. Furthermore, the $28 million/year State Energy Project, which funds climate change-fighting energy projects, may get entirely shuttered.

Tough to Wait: FSLR is not an easy stock to hold onto mentally. The S&P 500 index just booted it out of its 500 member companies. Adding insult to injury, current momentum darling Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the companies that entered the S&P 500 with the latest revision. First Solar stock used to be a momo play itself, but now it’s languishing at multiyear lows.

The company is currently losing money at a prodigious clip. It recently offered disappointing guidance for 2017. In particular, margins are heading downward for the year as a flood of competitors’ panels hit the market. And despite its large cash pile, First Solar doesn’t pay a dividend. Thus, investors get nothing while they wait for the solar cycle to finally turn back upward.

FSLR Stock Pros

Fantastic Balance Sheet: Baird’s analyst Ben Kallo recently defended First Solar, saying that it’s “the one to own” during this challenging environment. He noted solid bookings, despite the difficult environment. Furthermore, he highlighted the company’s strong technological position, which is allowing it to earn premium pricing in some markets.

That decent competitive position is backed with a fantastic balance sheet. First Solar currently comes with $49 per share in tangible book value. That suggests that a share today, which goes for under $30, would be worth $50 if the company liquidated tomorrow. Even if you assume some of their solar facilities are worth less than book value, there is still a huge margin of safety here. First Solar holds roughly $2 billion of cash and marketable securities on the balance sheet against a minimal liability position. At today’s price, of First Solar’s $3 billion market cap, $1.7 billion of value comes from the cash hoard, and only $1.1 billion from the solar business. That’s pretty cheap.

Chinese Concerns Overblown: If there is one thing the Trump administration is good for, it is helping U.S.-based manufacturers. While it’s far too early to know how U.S.-China trade relations will change over the next four years, there is a decent chance Chinese imports will be taxed more heavily. That’d be great news for First Solar.

Even if Trump doesn’t put an import tax in place, First Solar’s competitive position is probably stronger than investors currently think. First Solar uses a different technology, based on cadmium telluride (CdTe), than the Chinese players. CdTe technology can be cheaper per panel, and has specific advantages, such as performing better in hot climates. CdTe currently makes up only a single-digit percentage of the solar panel market. First Solar should be able to hold or improve its market position due to its different technology that some end buyers will prefer.

Massive Short Interest: First Solar didn’t used to be popular with short sellers. A year ago, FSLR stock traded at closer to $60, and bears had sold just five million shares short.

Things have changed since then. As of the most recent data, short sellers have increased their bet to almost 19 million shares of stock. And they keep increasing their position — it has been up almost every two-week period of 2017, and the most recent data notched another new high. Bears are risking a classic sell low, buy high investing mistake. Once FSLR stock bottoms, the shorts will provide extra ammunition to the ensuing rally. At 25% of the float currently short, that’s a lot of pent-up demand.

Verdict

I concur with Mr. Kallo about First Solar. Admittedly, solar is going through a horrific patch right now. The industry had already oversupplied the market even before Trump arrived on the scene, potentially crushing American demand for the next few years.

However, when buying a company for a turnaround in a battered industry, you want to focus on the one with scale, a strong balance sheet and relatively low production costs. First Solar fits the bill. While it might be a while before First Solar becomes strongly profitable again, there is a great chance the company will survive this downturn and come out as a sector leader.

And for FSLR stock, it wouldn’t take much to turn investor sentiment up at least modestly from this depressed level.

At the time of this writing, Ian Bezek was long FSLR stock. You can reach him on Twitter at @irbezek.