3 Solar Stocks to Buy Now

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Lower crude oil prices aren’t just affecting the various oil & gas producers. The contagion has spread to the solar stocks and other renewable energy firms. Over the past 52 weeks, as oil has continued to fall, the broad-based and sector proxy — the Guggenheim Solar ETF (TAN) — has sunk around 46%. Many individual solar stocks have fallen by even greater amounts.

solar stocks panel green energy 630 ISP

Source: ©iStock.com/danielschoenen

The pervasive idea is that, with traditional fossil fuels down so low, many forms of renewable energy can’t compete. They just don’t make sense on cost front. The solar stocks have fallen hard on that notion.

However, that notion is completely bull.

The truth is, we don’t use oil to generate electricity. In fact, oil only generates about 1% of our electricity in the U.S. Oil is predominantly a transportation fuel. Solar and oil are not real substitutes for each other anymore.

The real beauty is utilities know this fact and continue to add solar power generation at faster and faster rates. Which is why the Solar Energy Industries Association (SEIA) estimates that solar energy generation will triple by 2022 and reach 95 GW worth of capacity.

Under that scenario, the beaten down solar stocks are huge values. Here are three solar stocks to buy today.

Solar Stocks To Buy #1: First Solar (FSLR)

first solar fslr stockGiven the recent weakness in solar stocks, it may pay to go with the king. And in this case, the sun-king is very much First Solar (FSLR).

As we’ve mentioned before, FSLR isn’t much of a panel player anymore. Sure, there firm still manufactures some of the most advanced and efficient panels on the planet. But its real bread-and-butter is building out large-scale, utility-sized projects. These are exactly where the growth in solar is coming from. And FSLR has been able to capitalize on this in spades.

The firm continues to rack up build-outs, sales and power purchase agreements for its plants. The latest is a deal with Edison International (EIX) for four solar farms totaling 500 MW. These sorts of big deals have helped FSLR expand its backlog of contracted projects to more than 3.3 GW. As a result, management expects that utility scale solar projects will continue to drive better earnings throughout 2016. Already, the firm has upped its guidance for the new year.

This could help explain why FSLR has been a star among the solar stocks so far this year, only dropping by 2%. But with $100 price targets on FSLR stock, that slight drop still signals a huge bargain.

Solar Stocks To Buy #2: SolarEdge Technologies (SEDG)

solaredge sedg stockSolarEdge Technologies (SEDG) is a unique bird among the solar stocks because it doesn’t make panels, Rather, SEDG provides other equipment needed to make panels actually work on roof tops and in installations. This equipment includes power optimizers, PV inverters as well as a suite of cloud-based module monitoring software.

The thing is that solar panels create DC power and our grid, your hair dryer and almost every other appliance is run on AC power. You need special equipment to get the two to sync together. SEDG makes that equipment.

More importantly, SolarEdge’s equipment is designed to run as a complete system that any installer can use, whether that’s SolarCity (SCTY) or Vivant (VLSR) or your local Mom & Pop shop.

And SEDG has been making cash in spades. SolarEdge’s reported revenue of $125 million during the last quarter was a huge 70% gain over a year ago and represented another record quarter. So did SEDG’s quarter-over-quarter EPS gain of 72%. With the firm actually making money, SEDG provides a low-risk play relative to other solar stocks, thanks to growth in roof-top and small-scale solar.

Solar Stocks To Buy #3: Trina Solar (TSL)

trina solar tsl 185Trina Solar (TSL) has been hit doubly hard over the last year or so. Aside from being a solar stock, it’s also a Chinese company. And the slowdown in Asia’s emerging Dragon has been felt across the board in its equities.

However, TSL maybe a value in the making.

Unlike a lot of stocks in the Chinese solar sector, Trina is generally profitable and is one of the largest producers of solar panels in the world. TSL makes some of the most efficient panels for their cost, which makes it ideal for large-scale products.

And TSL is now starting to build out more projects. Taking its cue from rivals like FSLR, Trina has started to finance, build and sell large-scale grid ready projects. And with such sun-catching panels, TSL should continue to get the nod from utilities looking to add solar to their generation capacity.

Given its slide, TSL may be one of the best solar stocks bargains out there. Its founder certainly thinks so: He recently made an offer to take it private at a premium. Even if that deal doesn’t go through, investors still have one of the best solar stocks for the long haul.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

Aaron Levitt is an investment journalist living in Ohio. With nearly two decades of experience, his work appears in several high-profile publications in both print and on the web. Also likes a good Reuben sandwich. Follow his picks and pans on Twitter at @AaronLevitt.


Article printed from InvestorPlace Media, https://investorplace.com/2016/02/solar-stocks-flsr-sedg-tsl/.

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