In this article, we will take a look at the 5 most undervalued solar stocks to buy according to hedge funds. To see more such companies, go directly to 10 Most Undervalued Solar Stocks to Buy According to Hedge Funds.
5. SunPower Corporation (NASDAQ:SPWR)
Number of Hedge Fund Holders: 26
With a PE ratio of 53 (compared to industry PE of 83), SunPower Corporation (NASDAQ:SPWR) is one of the most undervalued solar stocks to buy according to hedge funds. SunPower Corporation (NASDAQ:SPWR) has lost about 16% in value over the past six months. In November, SunPower Corporation (NASDAQ:SPWR) shares gained after investment firm Credit Suisse upgraded SunPower Corporation (NASDAQ:SPWR) to Neutral from Underperform. The ratings upgrade came after SunPower Corporation (NASDAQ:SPWR) posted strong Q3 results that beat estimates. SunPower Corporation (NASDAQ:SPWR) also reaffirmed its 2022 guidance. SunPower Corporation (NASDAQ:SPWR) is expecting its adjusted EBITDA per customer to come in between $2,000 to $2,400.
A total of 26 hedge funds tracked by Insider Monkey reported owning stakes in SunPower Corporation (NASDAQ:SPWR) as of the end of the third quarter, up from 21 funds in the previous quarter. The total value of these stakes was about $190 million.
4. NRG Energy, Inc. (NYSE:NRG)
Number of Hedge Fund Holders: 27
NRG Energy, Inc. (NYSE:NRG) is also one of the most undervalued solar stocks to buy according to hedge funds. NRG Energy, Inc. (NYSE:NRG) has a PE ratio of 4.28 as of January 27 market close. NRG Energy, Inc. (NYSE:NRG) also pays dividends. It has a dividend yield of over 4%. Earlier in January, NRG Energy, Inc. (NYSE:NRG) increased its dividend by a whopping 8% to $0.3775 per share. The dividend is payable on February 15 to shareholders of record as of February 1.
As of the end of the third quarter, 27 hedge funds tracked by Insider Monkey had stakes in NRG Energy, Inc. (NYSE:NRG). The total value of these stakes was $1.2 billion. The biggest stakeholder of NRG Energy, Inc. (NYSE:NRG) was Richard S. Pzena’s Pzena Investment Management which owns a $635 million stake in the company.
3. Consolidated Edison, Inc. (NYSE:ED)
Number of Hedge Fund Holders: 27
Consolidated Edison, Inc. (NYSE:ED) is getting the attention of smart money. As of the end of the third quarter, 27 hedge funds reported owning stakes in Consolidated Edison, Inc. (NYSE:ED), according to Insider Monkey’s database of 920 hedge funds. This was up from 21 hedge funds that reported having stakes in Consolidated Edison, Inc. (NYSE:ED) at the end of the previous quarter. This shows that the hedge fund sentiment around Consolidated Edison, Inc. (NYSE:ED) is positive.
Consolidated Edison, Inc. (NYSE:ED) is also one of the best and most reliable dividend stocks. Consolidated Edison, Inc. (NYSE:ED) has upped its dividends for over four decades in a row. Consolidated Edison, Inc. (NYSE:ED) has a dividend yield of over 3%.
In November, Consolidated Edison, Inc. (NYSE:ED) shares were upgraded by investment firm Bank of America to Neutral from Underperform. BofA also increased its price target for Consolidated Edison, Inc. (NYSE:ED) to $95 from $78.
2. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Holders: 47
While Sunrun Inc. (NASDAQ:RUN) has a relatively high PE ratio, it makes it to our list because it has lost 22% over the past six months and analysts are hopeful the shares of Sunrun Inc. (NASDAQ:RUN) could perform well in the future amid long-term growth catalysts. Sunrun Inc. (NASDAQ:RUN) is also popular among hedge funds and saw a jump in the number of funds having stakes in it in the third quarter. According to Insider Monkey’s database, 47 elite hedge funds have stakes in Sunrun Inc. (NASDAQ:RUN) as of the end of the September quarter, compared to 36 funds in the previous quarter. The biggest stakeholder of Sunrun Inc. (NASDAQ:RUN) is William B. Gray’s Orbis Investment Management which owns a $337 million stake in Sunrun Inc. (NASDAQ:RUN).
Sunrun Inc. (NASDAQ:RUN) is a market leader in the residential solar market. Sunrun Inc. (NASDAQ:RUN) says it has about 18% market share in the US solar market, while it enjoys a whopping 66% market share in solar subscriptions.
1. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 59
Enphase Energy, Inc. (NASDAQ:ENPH) makes it to our list of the most undervalued solar stocks to buy according to hedge funds because Enphase Energy, Inc. (NASDAQ:ENPH) has lost about 26% over the past six months and the shares seem to have long-term growth catalysts, according to several analyst. Hedge funds also piling into this solar stock. Of the 920 hedge funds tracked by Insider Monkey, 59 hedge funds had stakes in Enphase Energy, Inc. (NASDAQ:ENPH) as of the end of the third quarter of 2022, up from 53 funds in the previous quarter. The total worth of these shares was about $2.2 billion. According to Yahoo Finance, Enphase Energy, Inc. (NASDAQ:ENPH) stock has a forward PE ratio of 43, compared to renewable industry’s PE ratio of 83.
In October, Enphase Energy, Inc. (NASDAQ:ENPH) shares rallied after the company posted strong Q3 results and gave bullish guidance. Enphase Energy, Inc. (NASDAQ:ENPH) said it plans to open 4-6 manufacturing lines in the US because of the Inflation Reduction Act.
ClearBridge Investments made the following comment about Enphase Energy, Inc. (NASDAQ:ENPH) in its Q3 2022 investor letter:
“In IT, Enphase Energy, Inc. (NASDAQ:ENPH) delivered a strong quarter driven by secular growth in global rooftop solar, increased penetration into Europe, where demand accelerated, and a continued ramp up in battery storage sales. Also with a strong presence in the U.S., Enphase Energy designs and manufactures microinverters for residential and small commercial solar PV systems and has made strides in evolving from a solar inverter maker into a “home energy management” company that can act as the brains for the home’s energy system, including microinverters for solar, as well as storage and energy management software.”
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