3 (tie). MEMC Electronic Materials, Inc. (NYSE:WFR)
MEMC Electronic Materials, Inc. (NYSE:WFR) was another hedge fund solar favorite, with 16 invested, like GT. Unlike GT, though, this was the same number of managers invested from Q3, and shares have performed even better year-to-date, up 65.4%. This has rewarded Rishi Bajaj, Toby Symonds, & Steve Tesoriere’s Altai Capital, Clint Carlson’s Carlson Capital, and Joseph A. Jolson’s Harvest Capital Strategies quite well, and with a sales multiple trading at a 52% discount to parity, there’s obviously some value still here. On the Street, MEMC Electronic Materials, Inc. (NYSE:WFR)’s EPS forecast is better than even Applied Materials, Inc. (NASDAQ:AMAT), settling in the mid-12% range, so this looks like another GARP play that’s not exactly common in solar.
5 (tie). Trina Solar Limited (ADR) (NYSE:TSL)
Nine hedge funds are bullish on Trina, up by one since Q3. Shares have bounced a modest 14% year-to-date, rewarding investors like Kerr Neilson and John A. Levin, two of the top 450 fund managers we track.
5 (tie). SunPower Corporation
Like Trina, nine hedge funds are invested in SunPower Corporation (NASDAQ:SPWR), down from the 13 that held long positions one quarter earlier. Interestingly, managers that sold out have got to be kicking themselves, as shares of the vertically integrated solar company have returned over 130%. Shares were recently upgraded to “Outperform” from “Neutral” at Baird, particularly due to a “growing leasing business, cost reduction initiatives and technology innovations.”
Some of the top hedgies invested here are Chuck Royce’s Royce & Associates and John A. Levin, and like MEMC Electronic Materials, Inc. (NYSE:WFR), shares still sport a discount to sales value parity—one signal value investors can’t ignore. While hedge fund interest in SunPower Corporation (NASDAQ:SPWR) isn’t booming by any means, it’s important to note that of the top four long positions in the stock last quarter, all four were upping their stakes by an average of 1,100%.
Final thoughts
While there are plenty of metrics available for the average investor to use when analyzing First Solar, Inc. (NASDAQ:FSLR) and the rest of the stocks mentioned here, one that is the most crucial is hedge fund sentiment, due to the fact that significant outperformance is possible if you know where to look. Interest in solar stocks isn’t mind-blowing by any means, but those who are bullish on this space hold a very high conviction in its future—a trait that most solar investors likely share. It’s for this very reason why these picks are important to watch, especially as first quarter filings come in later this month.
Disclosure: none
