5 Most Undervalued Solar Stocks To Buy According To Hedge Funds

In this article, we discuss 5 most undervalued solar stocks to buy according to hedge funds. If you want to read our detailed discussion on the solar industry, head over to 11 Most Undervalued Solar Stocks To Buy According To Hedge Funds. 

5. Sunrun Inc. (NASDAQ:RUN)

Number of Hedge Fund Holders: 24

P/E Ratio as of November 2: 23.62

Sunrun Inc. (NASDAQ:RUN) specializes in residential solar energy solutions in the United States, including design, installation, sales, ownership, and maintenance. The company also offers solar products, battery storage, and services to residential homeowners and commercial developers. Sunrun Inc. (NASDAQ:RUN) is one of the most undervalued solar stocks. On November 1, the company announced a Q3 non-GAAP EPS of $0.40, beating market estimates by $0.56. However, revenue for the period dropped nearly 11% year-over-year to $563.18 million, missing Wall Street consensus by $11.9 million. 

According to Insider Monkey’s second quarter database, 24 hedge funds were bullish on Sunrun Inc. (NASDAQ:RUN), compared to 27 funds in the prior quarter. William B. Gray’s Orbis Investment Management is the largest stakeholder of the company, with approximately 14 million shares worth $250 million. 

4. Clearway Energy, Inc. (NYSE:CWEN)

Number of Hedge Fund Holders: 29

P/E Ratio as of November 2: 32.62

Clearway Energy, Inc. (NYSE:CWEN) is a renewable energy company in the United States, operating through Conventional, Renewables, and Thermal segments. The company manages wind and solar generation projects, as well as natural gas generation facilities. Clearway Energy, Inc. (NYSE:CWEN) is one of the most undervalued solar stocks to buy according to hedge funds. On November 2, the company declared a $0.3964 per share quarterly dividend, a 1.9% increase from its prior dividend of $0.3890. The dividend is payable on December 15, to shareholders of record on December 1. 

According to Insider Monkey’s second quarter database, 29 hedge funds were bullish on Clearway Energy, Inc. (NYSE:CWEN), compared to 25 funds in the preceding quarter. Israel Englander’s Millennium Management is the biggest position holder in the company. 

3. Array Technologies, Inc. (NASDAQ:ARRY)

Number of Hedge Fund Holders: 32

P/E Ratio as of November 2: 34.04

Array Technologies, Inc. (NASDAQ:ARRY) manufactures and markets ground-mounted tracking systems utilized in solar energy initiatives worldwide, including the United States, Spain, Brazil, and Australia. The company’s operations are divided into two segments – Array Legacy Operations and STI Operations. On September 19, Bank of America included Array Technologies, Inc. (NASDAQ:ARRY) in its US 1 List and maintained a Buy rating with a $30 price target. This decision was based on the company’s exceptional profit potential and ongoing growth opportunities, as per BofA analyst Julien Dumoulin-Smith. 

According to Insider Monkey’s second quarter database, 32 hedge funds were long Array Technologies, Inc. (NASDAQ:ARRY), compared to 31 funds in the prior quarter. Jos Shaver’s Electron Capital Partners is the leading stakeholder of the company, with 5.4 million shares worth $121.8 million. 

2. Enphase Energy, Inc. (NASDAQ:ENPH)

Number of Hedge Fund Holders: 50

P/E Ratio as of November 2: 19.50

Enphase Energy, Inc. (NASDAQ:ENPH) creates, manufactures, and sells home energy solutions for the solar industry in the United States and internationally. The company provides semiconductor-based microinverters that operate at the individual solar module level, along with proprietary networking and software for energy monitoring and control. Enphase Energy, Inc. (NASDAQ:ENPH) is one of the most undervalued solar stocks to monitor. On October 26, the company reported a Q3 non-GAAP EPS of $1.02, beating market estimates by $0.02. The revenue of $551.08 million, however, fell Street forecasts by $15.72 million. 

According to Insider Monkey’s second quarter database, 50 hedge funds were bullish on Enphase Energy, Inc. (NASDAQ:ENPH), compared to 55 funds in the last quarter. Philippe Laffont’s Coatue Management is a prominent stakeholder of the company, with 612,351 shares worth $102.5 million. 

ClearBridge SMID Cap Growth Strategy made the following comment about Enphase Energy, Inc. (NASDAQ:ENPH) in its Q2 2023 investor letter:

“We exited our position in Enphase Energy, Inc. (NASDAQ:ENPH), in the IT sector, which designs, manufactures and sells semiconductor equipment for the residential solar photovoltaic industry. New regulations within California, as well as improving supply chain dynamics in Europe, have placed additional pressure on the company. Facing concerns surrounding weaker U.S. residential demand, decelerating revenue growth trends and falling prices compressing margins, we elected to sell the position and redeploy our assets to other, higher-conviction holdings.”

1. NextEra Energy, Inc. (NYSE:NEE)

Number of Hedge Fund Holders: 59

P/E Ratio as of November 2: 15.88

NextEra Energy, Inc. (NYSE:NEE) produces, transmits, and distributes electricity in North America. They generate power from different sources including wind, solar, nuclear, coal, and natural gas. NextEra Energy, Inc. (NYSE:NEE) develops and manages long-term contracted assets involving clean energy solutions like renewable facilities, battery storage projects, and electric transmission. It is one of the most undervalued solar stocks according to hedge funds. On October 13, NextEra Energy, Inc. (NYSE:NEE) declared a $0.4675 per share quarterly dividend, in line with previous. The dividend is payable on December 15, to shareholders of record on November 24. 

According to Insider Monkey’s second quarter database, 59 hedge funds were bullish on NextEra Energy, Inc. (NYSE:NEE), same as the last quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a significant stakeholder of the company, with 2.56 million shares worth $190.4 million. 

Madison Sustainable Equity Fund made the following comment about NextEra Energy, Inc. (NYSE:NEE) in its Q3 2023 investor letter:

“Although NextEra Energy, Inc. (NYSE:NEE) reported an in-line second quarter, the stock has been weak primarily because of rising interest rates. NextEra also reported slower renewables backlog growth than expected. We do not view this as an issue as we expect the development pipeline timeline may not be as predictable as investors would like. The environment for renewables remains favorable both from a demand perspective as well as cost perspective.”

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