Is Now The Time To Buy Solar?

Over the past few weeks, we have witnessed dramatic events previously unseen in recent history—not the least of which was the collapse of oil. The price of a barrel of oil is currently sitting near 18-year lows, sending a shockwave through the global economy. 

The COVID-19 pandemic is the main reason behind all this drama, however the oil war between Russia and Saudi Arabia has only added more fuel to the fire. Against this backdrop, it makes sense to ponder the future of alternative energy. Will the global glut of oil be a boon for investors in alternative energy sources like solar? 

How Solar Has Reacted

Just one month ago, SolarEdge Technologies SEDG was at $108. As of this writing, it is at $74, which presents a 31% fall. Another renewable giant, the largest wind turbine producer, Vestas Wind System VWDRY also suffered a big hit, with shares falling from $35 to ($23).

Things got even worse for JinkoSolar Holding Co. JKS, an important solar industry player whose stock has plunged 48%. Although electricity is not generated by oil, overall energy mayhem influences solar energy and other renewables. Franchise Holdings International FNHI saw its stock price plunge 50%, but nevertheless announced this morning that they applied for and published their TerraVis solar generator system in China, Europe, Canada, and U.S.

The logical question is why solar companies are affected by situations like this. Well, long story short, whenever oil prices meltdown, renewables investments also become less attractive. However, lower oil prices do not influence investments in solar energy when it comes to a long-term perspective. It's more like short-term noise that might provide unique investment opportunities.

SolarEdge Technologies – An Asset Worth Having

Although the entire energy sector is messed up due to recent developments, there still might be a stock or two to buy. One I like is SolarEdge. Coronavirus impacts notwithstanding, SolarEdge projected earnings of $1.28 per share for the current quarter. If delivered, this will represent year-over-year growth of 100%. The company also estimated that quarterly revenues will be $431 million, which is 58% higher than the prior-year quarter.

That strong year-over-year performance earned the company a Strong Buy rating according to Zacks Research. 

Conclusion

Regardless of the current situation, the climate for clean energy is not going to change long-term. Solar energy presents an inevitable future as we aim to reduce greenhouse gases. With organizations like the EU planning to spend more than €500 billion in order to reduce its carbon footprint, investors interested in making a higher return should consider sustainable industries like solar. 

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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