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Michael Michaud
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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • This Weeks Stock Pick - Investing In Solar Power 0 comments
    Nov 4, 2013 8:53 AM | about stocks: SPWR, FSLR, STP

    Click Here for a Free Trial of the "Profit Rockets" Stock Pick Service

    Thanks to strong demand and a turnaround in key international markets, solar power investments have been quite strong for much of 2013. ETFs tracking the sector have led the way for much of the year, including nearly a 120% gain for the top fund in the space, (NYSEARCA:TAN).

    And with a series of earnings beats lately, the short term future could be looking very bright for the sector as well. This is particularly true when looking at one of the top names in the space, SunPower (NASDAQ:SPWR).

    SunPower in Focus

    SunPower is California-based company that designs and manufactures solar systems for residential, commercial, and utility purposes around the globe. The company is actually majority owned by European energy giant Total (NYSE:TOT), but it has been trading on its own for nearly a decade.

    While some take strictly a low cost approach, SPWR zeroes in on high efficiency panels. According to their latest 10-Q, the company has among the most efficient panels in the industry, making this a key selling point for SunPower when compared to its competitors. This has been a great approach in the current solar power bull market, especially if you consider the company's latest earnings results.

    Recent SPWR Earnings

    At the end of October, SPWR reported EPS of 33 cents a share, compared to a loss of 5 cents a year ago. Meanwhile, the company also crushed the consensus estimate, which called for earnings of 24 cents a share.

    Although guidance disappointed some investors, SPWR is laying the groundwork for longer term gains. In fact, the firm announced that it was going to expand solar cell manufacturing capacity by more than 25%, bringing their total capacity to 1.8 GW, and suggesting to many that SunPower's products remain in high demand.

    Outlook

    Thanks to this capacity expansion and the strong anticipated demand, SunPower is looking to have another high growth quarter. Year-over-year growth is currently expected to be 182%, while the full year growth is looking to come in at nearly 700% earnings growth when compared to the previous year.

    Estimates have also moved higher in recent days, suggesting an increasingly bullish take by analysts. And with a strong history of beats-all of the last four have been beats-there is plenty of reason to believe that SPWR can live up to the hype next quarter as well.

    Due to these factors, SunPower has earned itself a Zacks Rank #1 (Strong Buy). This means that we are looking for more outperformance from this strong stock to finish up 2013, and for this company to continue to move higher.

    Bottom Line

    SunPower is looking great from several different angles. Its products are high quality and the industry is booming. The solar power industry is actually ranked in the top 20% overall, so there is pretty strong trend underlying the bull case here.

    So if you are looking to get in on solar stocks, this high quality manufacturer-which has plenty of support from Total-could be an excellent choice. It is expanding capacity and if its efficient panels stay in demand, the stock may continue to rise as we end 2013.

    Click Here to Review More Financial Intelligence

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    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SPWR over the next 72 hours.

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