Despite a strong market rally in the past year, some sectors haven’t performed well at all. Many have even continued trending lower, even after taking a hit in 2022. Most of the market’s return has been dominated by big-cap tech stocks.
But with the market starting to rotate and non-big-cap tech stocks are taking the lead, they may be a big winner in the months ahead. That includes solar energy companies, which have substantially lagged markets in 2023.
In the space, a number of players are starting to come off one-year or longer lows.
That includes First Solar (FSLR), the industry leader and biggest player in the solar space. Shares are getting upgraded by analysts following their new trend higher.
While solar stocks haven’t been the darling of the energy sector, they’re showing signs of life. First Solar’s revenues are up 27 percent over the past year.
And the stock trades at 12 times forward earnings, compared to 170 times earnings at the end of 2022.
Action to take: Solar stocks could have far more upside in the months ahead as they gain momentum. First Solar could see mid-double-digit returns in the next year if the market continues to trend higher.
For traders, the March 2024 $220 calls, last going for about $3.50, could see high-double-digit returns or better.
If shares continue to trend as strong as they have in the past few weeks, the option stands a good chance of moving in-the-money before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.