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Don’t sleep on solar stocks, says the trader. Why he sees value

Solar stocks are faltering despite high expectations.

RBC Capital Markets began hedging Sunrun Wednesday, by assigning it an outperformance and giving it a price target of $ 81 per share. Even so, shares of the solar panel maker closed 4% lower at $ 54.21.

the Invesco Solar ETF (TAN) also took a hit on Wednesday, falling 3% to $ 86.48. The popular fund is now down about 29% from its January high.

Katie Stockton, Managing Partner and Technical Analyst at Fairlead Strategies, has been watching the weakness show itself for some time.

“Solar stocks have been under pressure along with growth stocks,” she told CNBC. “Trading nation” Wednesday.

Stockton said Fairlead initially recommended a short Enphase EnergyTAN’s largest stake, but which would later cover the position as a short-lived TAN correction appeared to stabilize.

“I think it’s a good stadium for a possible rescue rally,” said Stockton. “The ETF had already increased by almost 500% of this amount Covid low compared to last year. A retracement like this is healthy, in our opinion, and can contribute to the long-term uptrend. “

Quint Tatro, chief investment officer of Joule Financial, said he is keeping an eye on solar stocks.

“Investors cannot fall asleep on these names here,” he said in the same “Trading Nation” interview. “It’s easy to do with underperformance, but I think there is some value to be found.”

Tatro’s first choice was First solar.

“We see this company almost like a utility stock, like a solar company game,” he said, highlighting the company’s tangible book value of $ 52 per share, relatively low debt and noticeable growth. benefits.

“We need a boost. It’s true for growth. It’s true for solar power, but don’t fall asleep on those names,” he said. “I think they will shine again.”

Disclosure: Joule Financial and Tatro own shares of First Solar.


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