Great Pick With Ford! What's Next?

It hasn't been a pretty time lately for automakers in general, and Ford (NYSE: F) and fellow U.S. firms GM and Chrysler have taken it on the chin worse than their overseas competitors. Recently, Ford has been trying to turn things around by focusing more on its core business -- a strategy which involved selling off luxury brands Jaguar and Land Rover earlier in the year to Tata Motors.

The poor performance of Ford and its stock has been no surprise for investors in The Motley Fool's CAPS community, as Ford has carried a lonely one-star rating (out of five) for some time. And nobody on CAPS has read the stock better than alopex, who has correctly called the stock an underperformer on three separate occasions and earned more than 49 points for his timely calls.

alopex is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and he has managed a stock-picking accuracy of 73% while racking up more than 2,250 points. Ford hasn't been his only great call. Here's a look at a few of his other prescient picks:

So what is this investor looking at these days? Here are a few of his most recent calls on CAPS:

While not all of these picks may pan out, they could be a good place to start some further research. I decided to take a closer look at SunPower.

Questioning the alternatives -- part two
Last week, I took a look at Pacific Ethanol and the tough times the ethanol producers have seen lately. While solar players may not be getting squeezed quite as badly as the ethanol folks right now, the stocks in the industry have still been under a lot of pressure. SunPower is currently down 67% from its 52-week peak, while competitors like Suntech Power (NYSE: STP), First Solar (Nasdaq: FSLR), and Solarfun are all down between 30% and 75% from their highs.

Supply of the silicon needed to produce the solar cells may be tight, but oil prices are still high and the sun certainly hasn't been blotted out, so what happened? In short, it looks like public investors' expectations for solar companies are finally moderating.

The tough part about investing in a budding industry is that once the opportunity gets exposed, everyone wants a piece of it. In the case of solar, aside from the handful that I mentioned above, Trina Solar, LDK Solar, Yingli Green Energy, JA Solar, and China Sunergy -- just to name a few -- have all had their IPOs within the past couple years. And when it comes to competition, let's not forget about the larger companies out there that manufacture solar cells, like BP (NYSE: BP); the big, focused players, like Q-Cells and SolarWorld, that don't trade on U.S. exchanges; or the army of VC-backed private companies that are just waiting to displace current solar technology.

The result of all of this is that investors are reconsidering the kind of multiples they're willing to pay for solar companies. Even after its big drop, SunPower is still trading at 44 times its trailing non-GAAP earnings, and while that's only around 1.1 times its expected five-year growth rate of 41%, you have to believe that it'll pull off sustained growth of 41%. (According to the company, analysts base their expectations on non-GAAP earnings. Of course, including all the expenses excluded in the non-GAAP earnings, the company's trailing P/E is more like 500.)

There are also those who have taken the recent big price drops as a chance to get in on solar stocks. CAPS All-Star Gtrinvestor noted that SunPower's forward P/E was in the mid-20s at the end of February and that solar should continue to be a growing industry:

If solar energy can be produced cheaply, it will be accepted, if not, it won't. My guess is that at some point it will be economical. Unfortunately, I don't know which company will be that company, so I am placing a small wager that [SunPower] might be one of those companies.

So what's your take on SunPower? Get in the action by clicking over to CAPS. The service is absolutely free, and there are already more than 86,000 stock pickers chipping in to find the best stocks out there.

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