Alternative Energy Stocks Smart Money Loves

#2. SolarCity Corp (NASDAQ:SCTY)

– Number of Hedge Fund Shareholders (as of June 30): 26

– Total Value of Hedge Funds’ Holdings (as of June 30): $140.19 Million

The number of smart money investors from our system with equity investments in SolarCity Corp (NASDAQ:SCTY) increased to 26 from 23 during the second quarter, while the value of those investments rose by 33% quarter-over-quarter to $140.19 million despite the stock returning a negative 2% during the June quarter. In late July, electric car maker Tesla Motors Inc. (NASDAQ:TSLA) agreed to acquire the installer of residential and commercial solar energy systems in an all-stock deal valued at $2.6 billion. Tesla Motors recently won U.S. antitrust approval to buy solar panel installer SolarCity, yet another step towards achieving Elon Musk’s goal of creating a carbon-free energy and transportation company. However, both Tesla Motors and SolarCity are currently facing financial crunches as the two companies move closer to completing the controversial combination. Considering Tesla’s extremely high cash burn rate, acquiring the money-losing business of SolarCity does not seem to be a great idea. Kenneth Tropin’s Graham Capital Management reported owning 16.50 million shares of SolarCity Corp (NASDAQ:SCTY) in its latest 13F.

#1. First Solar Inc. (NASDAQ:FSLR)

– Number of Hedge Fund Shareholders (as of June 30): 30

– Total Value of Hedge Funds’ Holdings (as of June 30): $261.52 Million

There were 30 hedge fund firms tracked by our team with long positions in First Solar Inc. (NASDAQ:FSLR) at the end of the April-to-June period, as compared to 31 recorded at the end of the previous quarter. The overall value of those positions plunged by a disturbing 78% quarter-over-quarter to $261.52 million, partially due to a 29% decline in the value of First Solar shares. The 30 hedge funds invested in First Solar hoarded up around 5% of the company’s outstanding common stock. The global provider of comprehensive photovoltaic solar energy solutions has seen its market value plummet by 42% since the beginning of January. Just recently, analysts at Argus downgraded the rating on First Solar to ‘Hold’ from ‘Buy’, citing concerns around the company’s declining project backlog and strong price competition. Nevertheless, Argus analysts continue to view First solar “as the best-position company in the solar industry based on three factors”, one of which represents “its ability to remain profitable even as peers have been hurt by oversupplied markets and a lack of pricing power.” David Harding’s Winton Capital Management owns 263,118 shares of First Solar Inc. (NASDAQ:FSLR) as of June 30.

Disclosure: None