Trade of the Day: SunPower (SPWR)

Renewable energy could have a surprising benefit for deficit-challenged nations

Stocks took a day off on Monday, finishing modestly lower in a very quiet trading session. They were actually up most of the day until a sharp, strong selling program hit the tape in the last half hour. The U.S. dollar did weaken, which should have led to more strength in stocks, but realistically the market has come a long way in a brief period of time and it is due for a rest.

One of the main sticking points in the world is Greece’s relationship with its creditor overlords in the eurozone. The Greek government is running out of money, and eurozone authorities who could bail out the lovely, sun-baked, historic Mediterranean country are refusing to do that.

Greece can now tap only two sources of funds: the 7.2 billion euros left in its current bailout fund, or it could issue short-term debt that would be purchased by Greek banks. Eurozone officials are not allowing either until the new ruling party in Athens promises to implement economic reforms that the people of the country consider too austere.

Why can’t Greece be more like another equatorial country on the other side of the globe, Costa Rica? Not only is its budget balanced and its tourism flourishing, but on Monday we learned that this beautiful country in Central America is now being powered 100%  by renewable energy.

In fact, the state-owned power utility, Costa Rican Electricity Institute, said the country hasn’t had to burn a single fossil fuel for the entire year, marking nearly three months of completely clean energy, according to an article on Medium.com.

This is one reason that I think the time is right for renewable energy producers, whether they are focused on hydroelectric, solar or wind power. They are cheap and will alleviate a lot of the current account balances that countries have, since they won’t have to send so much of their country’s revenues to the Persian Gulf or Venezuela.

One stock I like in this sphere right now is SunPower Corporation (SPWR), a $4.3 billion maker of solar power systems for residential, commercial and utility-scale power applications.

Trade of the Day: SunPower Corporation (SPWR)

SPWR shares have shot higher in recent weeks as investors have become increasingly comfortable with the idea that solar energy is en route to becoming cheap enough to deploy on a broader scale than ever before.

All of the major manufacturers’ shares are very cheap and on the move, which is a great combination, but let’s start with SPWR, which is one of the least expensive on an intrinsic-value basis. The stock rose as high as $160 in 2007 before falling all the way back below $5 by mid-2012. It’s back on the move now and has just exceeded the downtrend extending from mid-2014.

SPWR rose 0.3% on Monday. It’s been consolidating sideways, but no worries; this is going to be a premium stock in the next year. Shares look great for new highs.

Buy SPWR at $33.50 limit, good till canceled. Set up to sell the first half at initial target $35.60 and the remaining half at second target $39.50. Set a stop at $31.50 limit, good till canceled. 

Jon Markman operates the investment firm Markman Capital Insights. He also offers a daily trading advisory service, Trader’s Advantage, and CounterPoint Options, a service that helps individual traders make steady, consistent profits with volatility-related instruments.


Article printed from InvestorPlace Media, https://investorplace.com/2015/03/trade-of-the-day-sunpower-spwr/.

©2020 InvestorPlace Media, LLC