Today’s Digest is the first in a two-part series from Eric Fry, editor ofFry’s Investment Report. Eric is a 30-year international finance expert, former hedge fund manager, and InvestorPlace’s resident expert on global investment trends.
In 2016, he won the Portfolios With Purpose stock-picking contest — Wall Street’s most prestigious investment competition — making him America’s Top Trader.
Today, he tracks the world’s biggest macroeconomic and geopolitical events — and helps his subscribers make big gains from those emerging opportunities.
There’s one global trend in particular that’s been making his subscribers 100%+ returns in recent months — solar power. What’s behind these big gains?
Well, in short, solar is beginning to make its move. The International Energy Agency anticipates global spending on solar power to total $4 trillion over the next two decades — or about $180 billion per year. And it’s beginning now.
Solar is going to make some wise investors a great deal of money. Here’s Eric with the details on how you can be a part of it.
What This Milestone Moment Means for SunPower (SPWR) Stock
As Coal Declines, Solar Will Shine — and Create a $4 Trillion Opportunity
By Eric Fry, Editor, Fry’s Investment Report
In April of this year, for the first time ever, solar power generated more electricity in the United States than coal-fired power plants.
This landmark achievement was no fluke. As this chart shows, coal power has been trending lower for many years, while solar power has been trending higher.
And that’s going to benefit the stock of solar companies like SunPower Corp. (SPWR).
That San Jose, Calif.-based company designs, manufactures, and markets the industry’s most highly efficient solar systems. SunPower (SPWR) is the only major solar company that addresses all three end segments: power plant, commercial rooftop, and residential. And it’s a classic “turnaround story.”
During the last two years, the company has taken significant steps to sharpen its strategic focus and strengthen its balance sheet. Over that time frame, it has slashed its net debt by more than half, while also boosting its capacity to produce its industry-leading solar panels.
I expect SunPower (SPWR) stock to continue making strong upward progress throughout 2019 and beyond.
Now, on an annual basis, King Coal still lords over all renewable power sources. It provides about 25% of U.S. electricity, compared to 11% for solar and wind combined. But the long-term trends are clear: Coal down … renewables up. Whatever virtues coal power might possess, it is a relatively dirty technology — and dirty power isn’t as popular as it used to be. Most folks would much rather breathe the air around the world’s dirtiest solar-power facility than the air around the world’s cleanest coal-power facility.
Soon coal could go the way of other inferior technologies. Think: horse-drawn buggies, telegraphs, steam engines, vinyl records, pagers, Polaroid cameras, and Rand McNally maps.
The demise of coal, and ascendance of solar, is a well-established phenomenon. For proof of these divergent trends, you do not need to consult “expert” analysis. Just look at which industries are hiring and which ones are firing.
For most of the last decade, solar companies have been hiring and coal companies have been firing.
That information alone tells us a lot about which sector is likely to be the better investment.
Obviously, employees are an expense. So, an industry that is hiring rapidly is incurring rapidly rising expenses, which means that the profitability of that industry might not be growing as rapidly as employment.
But there is only one reason why a business hires an employee. Literally, only one reason. And that reason is that the executives of that business believe a new employee will add incrementally to profit.
The fact that the solar-power industry has been hiring at a breakneck pace tells us that the industry expects profit to soar. So do I.
But there’s more to solar’s big profit story — much more …
$4 Trillion in the Next Two Decades
At the end of 2018, the world’s installed capacity of solar-power generation totaled nearly half a billion megawatts — accounting for more than 7% of the globe’s power capacity.
But new capacity installations are on track to soar 25% this year, according to Bloomberg New Energy Finance, and to nearly double by 2021.
Many forecasts anticipate an equally spectacular growth trajectory. According to the International Energy Agency’s (IEA) “Sustainable Development Scenario,” solar-power capacity will soar fivefold between now and 2025, accounting for a whopping 38% of global power generation.
Looking further out, the IEA anticipates a 13-fold increase in solar-power capacity by 2040, at which point this renewable source would be providing two-thirds of the world’s power needs.
The IEA anticipates global spending on solar power to total $4 trillion over the next two decades — or about $180 billion per year.
If investment of this magnitude were to occur, solar power would become the world’s primary electricity source by 2040.
But you don’t have to wait 20 years to profit on this trend. By then, it could be too late — long after this spectacular growth trend has slowed.
Beyond SunPower (SPWR), there are a lot of companies out there that are jumping on the solar bandwagon, and there is clearly a lot of investing potential here, but it’s all about finding the right companies that offer significant long-term potential.
That’s why I’ve just released a special “all solar” edition of my brand-new newsletter — Fry’s Investment Report.
In it, I share two recommendations — and a whole lot of research — to get investors in on this technology’s profit ground floor.