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

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Solar stocks falter despite high expectations.

RBC Capital Markets launched the Sunrun hedge on Wednesday, pricing it outperforming and giving it a price target of $ 81 per share. Despite this, shares of the solar panel maker closed 4% lower at $ 54.21.

The Invesco Solar ETF (TAN) was also 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 weakness play out for some time.

Solar stocks were under pressure as well as growth stocks,” she told CNBC’s “Trading Nation” Wednesday.

Stockton said Fairlead initially recommended short-selling Enphase Energy, TAN’s largest holding, but then said he hedged the position as a short-lived correction in TAN appeared to stabilize.

“I think this is a good starting point for a potential rally relief,” said Stockton. “The ETF had already risen almost 500% from this Covid low from last year. A retracement like this is healthy, in our opinion, and something that may contribute to the uptrend at long term.”

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 value to be found.”

Tatro’s first choice was First Solar.

“We see this company almost like a public service stock, like a solar board 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, 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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