Election week 2020 dragged on from Thursday afternoon, and America hadn’t quite figured out who the next president would be. We seem to have figured out one thing: we still like solar stocks.
Shares in the solar inverter manufacturer at 11:50 AM EST today SolarEdge Technologies (NASDAQ: SEDG) were a solid 12.9% while solar panel manufacturers Canadian Solar (NASDAQ: CSIQ) had gained 13.1%, and the stock of solar installers Solar power (NASDAQ: SPWR) was 16.7% ahead.
It is not clear exactly why this is happening. As my colleague Travis Hoium, a Motley Fool contributor, pointed out yesterday, things are far from sunny for Democrats as hopes for a clean design of the House, Senate and White House are fading and the Senate looking as if it will Republican hands remain.
And yet it looks cheap on a company-specific level. SolarEdge stock sold earlier this week despite a huge jump in earnings ($ 1.21 per share that Wall Street expected $ 0.82) as investors worried about the fourth quarter outlook . With nearly 67 times the earnings arrears, the stock isn’t cheap today – but it is much cheaper than it was a week ago, and that could encourage investors to buy back. In fact, JPMorgan Chase told investors Tuesday to do just that, temporary price weakness is an entry point.
SunPower also had a wonderful report last week. It showed a pro forma loss that was less than expected and exceeded expectations with GAAP earnings of $ 0.24 per share. The company forecast another profit for the fourth quarter and raised its guidance for full fiscal 2020. This sparked a series of price target hikes for the stock on Wall Street.
Canadian Solar is not expected to start showing profits until November 19th. With so many other solar stocks doing so well so far, chances are the company will exceed expectations too. With analysts predicting Canadian Solar will lose money for the quarter ($ 0.05 per share), the bar is already pretty low.
Investors today may be counting on Canadian Solar to break that bar – and they may be right.