When it comes to solar stocks, the pullback has become overkill. Along the way, it’s creating a blood-in-the-street opportunity for these top solar stocks to buy. Even Truist analyst Jordan Levy hinted as much, noting that, “as with most ‘broad-natured’ selloffs…the recent price action creates an opportunity for those investors willing to ride through potential near-term volatility,” as quoted by MarketWatch.
For an idea of the severity of the latest solar pullback, look at the Invesco Solar ETF (NYSEARCA:TAN). The last time the stock was this low was early 2020. With patience, the ETF and related solar stocks to buy will bounce back strong.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) has had a rough year. Since January, the supplier of micro-inverter-based solar plummeted from about $260 to $116.01. This was due to higher interest rates and far tougher rules for solar panels in California. Not helping, the company issued a weaker-than-expected sales forecast, forcing the stock even lower.
The good news is that most of the negativity has been priced in. Plus, we have to consider that Enphase is still a crucial supplier of solar equipment. And its earnings are still expected to grow another 10% this year to $5.07, according to Barron’s. It’s also profitable – something we can’t say about many of its peers.
Helping, company director Thurman Rodgers just bought $4 million worth of stock over the last few weeks. Even Evercore analysts say the stock could climb more than 80% higher from here.
SolarEdge (SEDG)
SolarEdge (NASDAQ:SEDG) hasn’t done well either. After consolidating around $300 a share, the SEDG stock plunged to $120.62. Not only is it severely oversold on RSI, MACD, and Williams’ %R, but also it’s trading with a price-to-earnings-growth (PEG) ratio of just 0.26.
While the company did post adjusted EPS of $2.62, which beat expectations for $2.56, revenue fell short by about $2.6 million. Unfortunately, the company expects for third quarter revenue to come in only between $880 million and $920 million, which is lower than expectations for $1.05 billion revenue. This is thanks to higher interest rates in the U.S., especially with many people taking out loans to finance solar panels.
However, it does appear most of the bad news has been factored. With patience, I’d like to see SEDG again challenge $280. Furthermore, Chief Financial Officer Faier Ronen recently bought 875 shares of SEDG for $157,588.
Global X Solar ETF (RAYS)
If you want to diversify at low cost, with 50 solar holdings, buy Global X Solar ETF (NASDAQ:RAYS). With an expense ratio of 0.51%, the RAYS ETF invests in, companies are positioning to benefit from global solar growth.
Some of its top holdings include Enphase Energy, SolarEdge, First Solar (NASDAQ:FSLR), Sunrun (NASDAQ:RUN), Array Technologies (NASDAQ:ARRY), and Canadian Solar (NASDAQ:CSIQ).
At the moment, RAYS is another solar train wreck. Since the year began, the ETF plunged from about $23 to $12.56, where it’s oversold. I wouldn’t write this one off either. With patience, and hopefully, lower interest rates in the foreseeable future, I’d like to see the RAYS ETF run back to $19 a share.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
