Solar stocks fluctuate despite high expectations.
RBC Capital Markets started reporting on Sunrun on Wednesday, assessed the outperformance and set a price target of $ 81 per share. Even so, the solar module maker’s shares closed 4% 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 29% from its January high.
Katie Stockton, managing partner and technical analyst at Fairlead Strategies, has been watching the weakness for some time.
“Solar stocks have been under pressure along with growth stocks,” she told CNBC’s “Trading Nation” on Wednesday.
According to Stockton, Fairlead initially recommended selling Enphase Energy, TAN’s largest holding, but later covering the position as a short-lived TAN correction appeared to be stabilizing.
“I think this is a good place for a possible rally,” said Stockton. “The ETF was already up almost 500% from the Covid low last year. We believe that such a retracement is healthy and can contribute to the long-term upward trend.”
Quint Tatro, Joule Financial’s chief investment officer, said he should keep an eye on solar stocks.
“Investors can’t fall asleep with these names down here,” he said in the same interview with Trading Nation. “It’s easy to deal 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 utility company,” he said, highlighting the company’s tangible book value of $ 52 per share, relatively low debt, and remarkable earnings growth.
“We need momentum. That goes for growth. That goes for solar, but don’t fall asleep with those names,” he said. “I think they will shine again.”
Disclosure: Joule Financial and Tatro own shares in First Solar.
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