Why Enphase Vitality, SunPower, and First Photo voltaic Shares All Shined in March


What occurred

The shares of many various vitality corporations raced greater in March as traders tried to gauge the consequences of rising oil costs and regarded share value declines in early 2022 a possibility to purchase. Shares of solar energy corporations Enphase Vitality ( ENPH 2.04% ), SunPower ( SPWR -0.33% ), and First Photo voltaic ( FSLR 0.32% ) all shot greater throughout the month of March. The positive factors had been a respective 21%, 19.8%, and 11.2% for Enphase, SunPower, and First Photo voltaic, in keeping with knowledge offered by S&P World Market Intelligence.

So what

It wasn’t simply monetary outcomes from these corporations that drove shares greater in March. Although Enphase and SunPower reported strong fourth-quarter and full-year 2021 earnings outcomes, these studies got here in February. First Photo voltaic additionally launched robust fourth-quarter 2021 outcomes that improved markedly yr over yr.

However First Photo voltaic’s shares plummeted after the March 1 launch when the corporate predicted sharp top- and bottom-line declines for 2022. That is partly as a result of the corporate will see excessive manufacturing facility start-up prices in 2022 related to development investments. The inventory nonetheless rewarded shareholders with a double-digit acquire for the month, nonetheless, because it rode tailwinds that supported the general photo voltaic vitality sector

Solar panels on roof with palm tree in foreground.

Picture supply: Getty Pictures.

Now what

Uncertainty surrounding world vitality continued throughout March because the battle in Ukraine wore on. That helped hold oil costs over $100 per barrel for many of the month, together with a peak of greater than $120 per barrel. Larger fossil gas costs usually drive extra curiosity in various vitality investments, together with these photo voltaic corporations. However it’s not simply the present state of affairs that has photo voltaic shares greater; it is the potential for elevated photo voltaic era capability to assist present vitality independence in the long run. 

Enterprise for photo voltaic corporations had already been rising previous to the current concern about the way forward for vitality provides. Enphase reported that its fourth-quarter income grew 17% sequentially over its third quarter, and soared 56% in comparison with the 2020 fourth quarter. 

The corporate has been saying rising deployments of its photo voltaic and battery storage choices each domestically and internationally. Enphase additionally introduced an acquisition final month it plans to combine into its operations to assist speed up the adoption of photo voltaic installations. Enphase can afford to develop additional by means of acquisitions, too, because it ended 2021 with $1 billion in money. It additionally generated $97.2 million in money circulate from operations within the fourth quarter, whereas solely spending $13.2 million for capital expenditures. 

Even with the robust March efficiency in Enphase’s inventory, it is just up 12.5% yr thus far as a result of lagging efficiency earlier within the yr. Shares of SunPower are solely 2.6% greater for the yr, whereas First Photo voltaic inventory is down 3.6%. Buyers who’re photo voltaic as a long-term funding determined to make the most of the early-year drops, driving shares up final month. 

This text represents the opinion of the author, who might disagree with the “official” suggestion place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis – even certainly one of our personal – helps us all assume critically about investing and make choices that assist us grow to be smarter, happier, and richer.


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