Why SunPower Corporation (SPWR) Will Dominate Solar

Page 1 of 2

Don’t look now but SunPower Corporation (NASDAQ:SPWR) has become the best-performing stock in the solar industry. Over the past year, it’s been better than fellow U.S.-based companies First Solar, Inc. (NASDAQ:FSLR) and SolarCity Corp (NASDAQ:SCTY), and far better than most Chinese manufacturers. Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) and Trina Solar Limited (ADR) (NYSE:TSL) lag well behind even after recent pops higher; only Canadian Solar Inc. (NASDAQ:CSIQ) can come close to SunPower Corporation (NASDAQ:SPWR)’s return (and I’ll get into the reason for that below).

SPWR Total Return Price Chart

SPWR Total Return Price data by YCharts

So, why is this stock so hot and can the streak continue? I think so, and there are three big reasons why.

Downstream solar is the dominant paradigm
If you have the choice between risky solar manufacturers and a downstream installer, it’s better to choose the installer right now. They can lock in long-term power supply agreements, building a business that acts more like a bond than a volatile stock. SolarCity Corp (NASDAQ:SCTY) has used this model with success, and despite the fact that it isn’t reporting a profit yet, it’s building solar installations that will generate revenue for 20 or more years.

SunPower Corporation (NASDAQ:SPWR)

The same can be said for utility-scale solar, where First Solar, Inc. (NASDAQ:FSLR) dominates. Companies can build projects and sell them off to investors like Warren Buffett — who has bought projects from both SunPower Corporation (NASDAQ:SPWR) and First Solar, Inc. (NASDAQ:FSLR) – or own them and generate long-term cash flow. The latter option is best in the current environment, but if REIT and MLP models are opened up to this industry, that trend may change.

It’s expanding in the downstream market that has put Canadian Solar Inc. (NASDAQ:CSIQ) ahead of competitors as well. It’s building demand for its own panels and raising margins as a result.

But, if you want exposure to residential solar and utility solar there’s no better company than SunPower Corporation (NASDAQ:SPWR). It is one of the largest utility-scale installers in the world and has a concentrated product, called C7, that could drive the next generation of growth. In residential and commercial solar it’s smaller than SolarCity, but it projects more profitable installations and is growing quickly.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!