In this article, we discuss the 10 best solar energy stocks to buy today.
Solar energy stocks are rebounding following the recent increase in global oil and gas prices. According to recent news from Reuters, on September 23, Brent crude reached its highest level in more than two months at $77.25 per barrel, up to $1.06, or 1.4%. The price of natural gas also went up 100% in the US and 280% in Europe this year due to low storage inventories. The renewable energy sector is benefiting from the oil and gas industry’s recovery. Shares of Enphase Energy, Inc. (NASDAQ:ENPH), SolarEdge Technologies, Inc. (NASDAQ:SEDG), and Sunrun Inc. (NASDAQ:RUN) went up by 1.72%, 1.52%, and 4.32%, respectively, in the third week of September.
On the other hand, Invesco Solar ETF (NYSEARCA:TAN), which tracks the MAC Global Solar Energy Index, has returned 50.14% in the last year. In addition to Enphase Energy, Inc. (NASDAQ:ENPH), SolarEdge Technologies, Inc. (NASDAQ:SEDG), and Sunrun Inc. (NASDAQ:RUN), Invesco Solar ETF’s (NYSEARCA:TAN) holdings also include solar-energy specialist Shoals Technologies Group, Inc. (NASDAQ:SHLS) and residential solar energy company Sunnova Energy International Inc. (NYSE:NOVA) which gained 2.06% and 4.96%, respectively, in the last month.
Tesla, Inc. (NASDAQ:TSLA) is one of the biggest renewable energy companies that focus on bringing sustainable energy generation to residential homes by selling lithium-ion battery stationary home energy storage, solar panel, and solar roof in the US and globally. Shares of Tesla, Inc. (NASDAQ:TSLA) increased by 83.37% in the past twelve months.
Renewable energy is becoming more compelling to investors as the need to address the climate catastrophe by reducing carbon emissions becomes more widely recognized. Investors poured $174 billion into renewable energy technologies and companies in the first half of 2021, according to data from BloombergNEF, as reported by Bloomberg. Furthermore, investment in solar projects increased by 9% to $78.9 billion.
According to Valuates Reports’ market outlook report, the global solar energy market is expected to grow at a compound annual rate of 20.5% to $223.3 billion by 2026. The growth of the solar energy sector is supported by the growing adoption of residential, commercial, and community solar energy generation and application due to lower production and maintenance costs. Moreover, the presence of strong federal solar tax credit, such as the solar Investment Tax Credit (ITC), encourages more homeowners to switch to the use of solar energy.
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Our Methodology
The stocks on our list were picked based on their fundamentals and prospects for growth. We chose solar energy stocks that have long-term growth prospects and high analyst ratings.
We ranked these stocks based on the number of hedge funds having stakes in them, based on our data of over 873 hedge funds.
Why should we pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, let’s now discuss our list of the 10 best solar energy stocks to buy today.
Best Solar Energy Stocks To Buy Today
10. Shoals Technologies Group, Inc. (NASDAQ:SHLS)
Number of Hedge Fund Holders: 12
We start our list of 10 best solar energy stocks to buy today with solar-energy specialist Shoals Technologies Group, Inc. (NASDAQ:SHLS). The Tennessee-based solar company sells junction and splice boxes, inline fuses, cables, and wireless monitoring systems. Shoals Technologies Group, Inc.’s (NASDAQ:SHLS) electrical balance of system (EBOS) products are used in building solar energy projects.
On July 21, JPMorgan analyst Mark Strouse kept an Overweight rating on Shoals Technologies Group, Inc. (NASDAQ:SHLS) and increased his price target for the stock to $46 from $42.
In the second quarter of 2021, Shoals Technologies Group, Inc. (NASDAQ:SHLS) reported an EPS of $0.09, beating estimates by $0.00. The company’s revenue in the second quarter was $59.72 million and beat revenue estimates by $270,000.
At the end of the second quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $342 million in Shoals Technologies Group, Inc. (NASDAQ:SHLS), down from 22 hedge funds in the previous quarter worth $324 million.
In its Q1 2021 investor letter, ClearBridge Investments mentioned Shoals Technologies Group, Inc. (NASDAQ:SHLS), and shared their insights on the company. Here is what the fund said:
“Shoals Technologies, another new position, manufactures electric balance of systems (EBOS) components for ground-mounted solar projects and has been gaining market share for quality of service and price. The company has been primarily operating in the U.S. but is planning to expand internationally with its patented technology, and we see attractive secular growth in Shoals’s end markets.”
9. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 20
Brookfield Renewable Partners L.P. (NYSE:BEP) ranks ninth on the list of 10 best solar energy stocks to buy today. The company supplies electricity internationally through renewable energy sources such as solar and wind energy.
On September 22, Raymond James analyst Frederic Bastien upgraded Brookfield Renewable Partners L.P. (NYSE:BEP) to Outperform from Market Perform and increased his price target for the stock to $44 from $41.
In the second quarter of 2021, Brookfield Renewable Partners L.P. (NYSE:BEP) reported an EPS of -$0.13, missing estimates by -$0.17. Yet, the company’s revenue in the second quarter came in at $1.02 billion, up from $942 million in the second quarter of 2020, and beat revenue estimates by $90.58 million. The stock has gained 25% in the past twelve months.
At the end of the second quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $233 million in Brookfield Renewable Partners L.P. (NYSE:BEP), down from 24 hedge funds in the previous quarter worth $223 million.
In the Q1 2021 Investor Letter, ClearBridge Investments highlighted a few stocks and Brookfield Renewable Partners L.P. (NYSE:BEP) is one of them. Here is what the fund said:
“U.S. renewables utility Brookfield Renewable was another detractor. Brookfield Renewable is a pure-play renewables operator and developer headquartered in Canada and domiciled in the U.S., focused on international hydro, solar, wind, and storage technology. As more private and public institutions announce ambitious carbon reduction initiatives, Brookfield Renewable’s globally diversified, multi-technology renewables business makes it an attractive partner. Its development pipeline stands at 18,000 megawatts, providing confidence the company can meet its targeted double-digit cash flow growth through to 2025. Shares moderated amid expectations of rising bond yields, and a cool-off on the green trade.”
8. Clearway Energy, Inc. (NYSE:CWEN)
Number of Hedge Fund Holders: 21
Clearway Energy, Inc. (NYSE:CWEN) ranks eighth on the list of 10 best solar energy stocks to buy today. The New Jersey-based energy company is one of the biggest renewable energy providers in the US with over 4,700 net MW of installed wind and solar generation projects.
On August 26, UBS analyst William Grippin initiated a Buy rating on Clearway Energy, Inc. (NYSE:CWEN) with a price target of $36 per share.
Shares of Clearway Energy, Inc. (NYSE:CWEN) jumped 2.08% on September 22 as the solar company announced its second agreement with Toyota Motor Corporation (NYSE:TM) North America to supply power to its manufacturing facility in Mississippi.
At the end of the second quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $188 million in Clearway Energy, Inc. (NYSE:CWEN), down from 24 hedge funds in the previous quarter worth $232 million.
7. Sunnova Energy International Inc. (NYSE:NOVA)
Number of Hedge Fund Holders: 25
Sunnova Energy International Inc. (NYSE:NOVA) ranks seventh on the list of 10 best solar energy stocks to buy today. The Houston-based solar power company sells residential solar energy systems and storage solutions.
On August 31, Wolfe Research analyst Steve Fleishman initiated an Outperform rating on Sunnova Energy International Inc. (NYSE:NOVA) with a price target of $50 per share.
In the second quarter of 2021, Sunnova Energy International Inc. (NYSE:NOVA) reported an EPS of -$0.36, missing estimates by -$0.18. But the company’s revenue in the second quarter grew 55% year over year to $66.56 million and beat revenue estimates by $9.63 million. Sunnova Energy International Inc. (NYSE:NOVA) added about 12,700 new customers in the second quarter, bringing the total number of customers to 162,600 as of June 30, 2021. The stock has gained 28.8% in the previous year.
At the end of the second quarter of 2021, 25 hedge funds in the database of Insider Monkey held stakes worth $294 million in Sunnova Energy International Inc. (NYSE:NOVA), down from 26 hedge funds in the previous quarter worth $328 million.
In addition to Tesla, Inc. (NASDAQ:TSLA), Enphase Energy, Inc. (NASDAQ:ENPH), SolarEdge Technologies, Inc. (NASDAQ:SEDG), and Sunrun Inc. (NASDAQ:RUN), Sunnova Energy International Inc. (NYSE:NOVA) is one of the best solar energy stocks to buy today, according to market analysts.
6. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 31
First Solar, Inc. (NASDAQ:FSLR) ranks sixth on the list of 10 best solar energy stocks to buy today. The Arizona-based solar energy firm sells photovoltaic (PV) solar panel solutions.
On August 2, the stock gained 2.8% after Susquehanna upgraded First Solar, Inc. (NASDAQ:FSLR) to Positive from Neutral and raised its price target to $120 from $89, noting management’s bullish comments on solar module demand and pricing on the company’s second-quarter results call.
On September 21, Morgan Stanley analyst Stephen Byrd kept an Underweight rating on First Solar, Inc. (NASDAQ:FSLR) and increased his price target for the stock to $61 from $57.
In the second quarter of 2021, First Solar, Inc. (NASDAQ:FSLR) reported an EPS of $0.78, beating estimates by $0.22. The company’s revenue in the second quarter was $629 million and beat revenue estimates by $8.73 million. The company increased its 2021 revenue guidance for FY 2021 to $2.875 billion – $3.1 billion from $2.85 billion – $3.025 billion. The stock has gained 54% in the previous year.
At the end of the second quarter of 2021, 31 hedge funds in the database of Insider Monkey held stakes worth $317 million in First Solar, Inc. (NASDAQ:FSLR), up from 24 hedge funds in the previous quarter worth $304 million.
Tesla, Inc. (NASDAQ:TSLA), Enphase Energy, Inc. (NASDAQ:ENPH), SolarEdge Technologies, Inc. (NASDAQ:SEDG), Sunrun Inc. (NASDAQ:RUN), and First Solar, Inc. (NASDAQ:FSLR) are some of the biggest players in the solar energy market today.
5. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 37
SolarEdge Technologies, Inc. (NASDAQ:SEDG) ranks fifth on the list of 10 best solar energy stocks to buy today. The Israeli-based solar energy company develops and sells residential solar systems which include power optimizers, inverters, storage, and a monitoring platform.
On August 31, Wolfe Research analyst Steve Fleishman initiated an Outperform rating on SolarEdge Technologies, Inc. (NASDAQ:SEDG), noting that the company’s inverter products are likely to drive solar industry advancement.
In the second quarter of 2021, SolarEdge Technologies, Inc. (NASDAQ:SEDG) reported an EPS of $1.28, beating estimates by $0.17. The company’s revenue in the second quarter was $480.1 million, an increase of 55% year over year, and beat revenue estimates by $24.42 million. The stock has gained 41.5% in the past twelve months.
At the end of the second quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $675 million in SolarEdge Technologies, Inc. (NASDAQ:SEDG), up from 32 hedge funds in the previous quarter worth $421 million.
4. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 44
Enphase Energy, Inc. (NASDAQ:ENPH) ranks fourth on the list of 10 best solar energy stocks to buy today. The company manufactures and sells microinverters and energy storage for residential and enterprise solar panel systems.
On September 21, KeyBanc analyst Sophie Karp initiated an Overweight rating on Enphase Energy, Inc. (NASDAQ:ENPH) with a price target of $179 per share, emphasizing the solar company’s microinverter market share in the growing residential solar industry in the United States.
In the second quarter of 2021, Enphase Energy, Inc. (NASDAQ:ENPH) reported an EPS of $0.53, beating estimates by $0.11. The company’s second-quarter revenue came in at $316.1 million and beat revenue estimates by $4.82 million. Enphase Energy, Inc. (NASDAQ:ENPH) delivered 2.36 million microinverters in the second quarter of 2021, an increase of over 110% from 1.09 microinverters shipped in the second quarter of 2020. The stock has gained 50% in the past twelve months.
At the end of the second quarter of 2021, 44 hedge funds in the database of Insider Monkey held stakes worth $724 million in Enphase Energy, Inc. (NASDAQ:ENPH), down from 49 hedge funds in the previous quarter worth $804 million.
3. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Holders: 45
Sunrun Inc. (NASDAQ:RUN) is a San Francisco-based solar energy firm that ranks third on the list of 10 best solar energy stocks to buy today. The company manufactures and sells residential solar energy systems in the US. Sunrun Inc.’s (NASDAQ:RUN) systems are reported to have offset more than 2.5 million metric tons of CO2 in the last twelve months, according to the company’s Q2 report.
On September 9, Needham analyst Vik Bagri initiated a Buy rating on Sunrun Inc. (NASDAQ:RUN) with a price target of $75 per share, highlighting RUN’s 15% share of the residential solar market. The analyst cited that the fast adoption of EVs can keep Sunrun Inc. (NASDAQ:RUN) expanding in the future.
The company’s revenue in the second quarter grew 121% to $401.2 million and beat revenue estimates by $35.13 million. Sunrun Inc. (NASDAQ:RUN) added 26,110 new customers in the second quarter, bringing the total number of customers to 599,743 as of June 30, 2021.
At the end of the second quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $2.52 billion in Sunrun Inc. (NASDAQ:RUN), up from 41 hedge funds in the previous quarter worth $2.40 billion.
2. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 59
NextEra Energy, Inc. (NYSE:NEE) is a renewable energy provider based in Florida that ranks second on the list of 10 best solar energy stocks to buy today. The company distributes electricity in North America from solar, wind, and nuclear energy. The company also operates coal and natural gas facilities.
On July 13, Credit Suisse analysts initiated coverage of NextEra Energy, Inc. (NYSE:NEE) with an Outperform rating with a price target of $85 per share.
In the second quarter of 2021, NextEra Energy, Inc. (NYSE:NEE) reported an EPS of $0.71, beating estimates by $0.02. The company’s revenue in the second quarter was $3.93 billion. Shares of NextEra Energy, Inc. (NYSE:NEE) increased 18.6% in the past twelve months.
At the end of the second quarter of 2021, 59 hedge funds in the database of Insider Monkey held stakes worth $2.67 billion in NextEra Energy, Inc. (NYSE:NEE), down from 63 hedge funds in the previous quarter worth $2.72 billion.
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Topping the list of 10 best solar energy stocks to buy today is electric vehicle manufacturer Tesla, Inc. (NASDAQ:TSLA). California-based Tesla, Inc. (NASDAQ:TSLA) is popularly known for being an electric vehicle moat. The company delivered 201,204 electric vehicles in the second quarter of 2021, up 121% year over year. Additionally, Tesla, Inc. (NASDAQ:TSLA) also offers solar panels and energy storage.
On October 4, Wedbush analyst Daniel Ives maintained an Outperform rating on Tesla, Inc. (NASDAQ:TSLA) with a price target of $1,000 per share. The analyst is still bullish on Tesla, Inc. (NASDAQ:TSLA), estimating that the EV behemoth delivered 150,000 Tesla vehicles in September alone.
In the second quarter of 2021, Tesla, Inc. (NASDAQ:TSLA) reported an EPS of $1.45, beating estimates by $0.47. The company’s revenue in the quarter came in at $11.96 billion, an increase of 98% year over year, and beat revenue estimates by $559.33 million.
Tesla, Inc. (NASDAQ:TSLA) posted $801 million in revenue from its energy and storage business, up 62% from Q1 2021 and increased more than 116% year over year. Tesla, Inc. (NASDAQ:TSLA) reported $801 million in sales from its energy and storage division in the second quarter of 2021, up 62% from the previous quarter and grew more than 116% year over year. In comparison to the previous year, the total deployment of energy storage and solar energy in Q2 2021 increased by 205% and 215%, respectively. The stock has gained 64.53% in the past twelve months.
At the end of the second quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $9.29 billion in Tesla, Inc. (NASDAQ:TSLA), down from 62 hedge funds in the previous quarter worth $10 billion.
In the Q2 2021 investor letter of Worm Capital LLC, the fund mentioned Tesla, Inc. (NASDAQ:TSLA), and discussed its stance on the firm. Here is what the fund said:
“Tesla underperformed in the quarter, but we maintain our high conviction in the long-term thesis on each business model. Much like art or writing, investment research is a continuous process—it never really ends. Prices can move in either direction in any given quarter, but our advantage often comes from knowing the businesses so well that short-term fluctuations in pricing shouldn’t affect our decision-making. On high conviction positions, this patience is often rewarded, which is why research is so valuable to our process…
..Tesla is in a class of its own. What many in the market seem to (still) not understand is that Tesla is not a car company so much as a complex manufacturing firm—with significant recurring software potential—growing, in our view, at a targeted rate of 50-100% YoY over the next several years. Unlike any other automotive firm in existence today, Tesla alone is a vertically integrated hardware and software business developing state-of-the-art manufacturing techniques that will revolutionize the auto industry (i.e. its Giga Presses, 4680 cells, etc.). It is a generational company and we anticipate it will eventually be the largest company in the world. Many of the conventional narratives around competition displacing Tesla’s lead are fundamentally flawed, and the many headlines surrounding Tesla’s approach to autonomy are frustratingly superficial. (As an aside, we highly recommend watching Andrej Karpathy’s, Tesla’s head of AI, his recent presentation from June: “Tesla details its self-driving Supercomputer that will bring in the Dojo era”)”
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Disclosure: None. 10 Best Solar Energy Stocks to Buy Today is originally published on Insider Monkey.
