Great Call on ConocoPhillips! What's Next?

Last summer was undoubtedly the summer of oil, as crude oil prices flew to a dizzying $147 per barrel. Individual investors and seasoned pros alike were chasing oil and oil stocks like crazed tweens running down American Idol winner Kris Allen. Even Warren Buffett and Berkshire Hathaway (NYSE: BRK-A  ) got into the action with a big purchase of ConocoPhillips (NYSE: COP  ) stock.

With the benefit of hindsight, we now can say that it was all just a bit too frenzied. Oil prices ended up plunging, and energy-related stocks went right along with them. And in the world of big oil, Conoco was one of the worst hit.

The members of The Motley Fool's CAPS community haven't given up on Conoco though. Aside from a brief dip into four-star status last summer, the stock has been a steady five-star pick. For now though, it's members like indiobravo -- who rated Conoco an underperformer back in June of last year -- who are showing positive scores on Conoco picks. This Fool became one of CAPS' score leaders on Conoco as the stock took a heady 50% nosedive.

indiobravo is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and has managed an impressive stock-picking accuracy of 63% while racking up more than 1,000 points. Conoco isn't this player's only great call. Here's a look at a few of the other prescient picks:

Company

Date Picked

Call

Points

CAPS Rating
(out of 5)

Sasol (NYSE: SSL  )

3/12/07

Outperform

101

*****

Countrywide Financial

6/20/08

Underperform

79

NA

Washington Mutual

3/14/07

Underperform

71

NA

Data from CAPS.NA = not available. Countrywide Financial was acquired by Bank of America, and Washington Mutual was acquired by JPMorgan Chase (NYSE: JPM  ) .

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

Company

Date Picked

Call

CAPS Rating
(out of 5)

ReneSola (NYSE: SOL  )

4/14/09

Outperform

*****

JA Solar Holdings

4/14/09

Outperform

****

Apollo Investment

8/11/08

Outperform

****

Data from CAPS.

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

Will the sun shine for solar again?
The mad dash in oil prices and a major push to increase alternative energy usage not only brought loads of solar cell manufacturers to the public markets, it also led investors to bid up their share prices to levels reminiscent of the tech bubble. In the first quarter of last year, Suntech Power (NYSE: STP  ) traded close to 100 times trailing earnings, while First Solar's (Nasdaq: FSLR  ) multiple broke the 200 barrier.

ReneSola's valuation never reached such sky-high levels, but the company was also a latecomer to the party. After an early 2008 U.S. public offering, the stock doubled before getting caught in the same downdraft as every other solar stock. Today, ReneSola's stock trades 75% lower than its peak point.

One of my primary complaints about solar stocks is the seemingly endless amount of competition in solar cell manufacturing and the apparent low barriers to entry. When it's difficult to tell one company's operations from the next, it becomes a bit of a crapshoot to pick which will excel and which will fall by the wayside.

ReneSola, however, gets around my complaint by not focusing primarily on manufacturing solar cells, but rather on making the silicon wafers that companies such as Suntech and JA Solar use to make their solar cells. So instead of trying to build the best mousetrap, ReneSola is providing springs to the mousetrap manufacturers. To me, that makes ReneSola a better pick to capitalize on the potential of solar power overall.

The CAPS community certainly sees ReneSola as a promising pick. Of the 900-plus members who have shared their opinion on the stock, 887 have rated it an outperformer. CAPS All-Star viconquest jumped on board early this year and provided the following bullish pitch:

I believe they will survive and thrive; this company is transforming before our very eyes. Their previous strategy was as a niche waste silicon wafer producer, now they have shifted over completely into producing the lowest cost silicon wafers possible. They have heavy competition in this area, but they have new cost-effective technologies and a factory coming online in 2009 to drastically reduce costs. They are priced for indefinite negative growth which is astounding. I'm taking a chance.

But here's the important question: What's your take on ReneSola? Will a solar resurgence help it shine? Get in the action by clicking over to CAPS. It's absolutely free and already has more than 135,000 stock pickers chipping in to find the best stocks out there.

Related Foolishness:

Suntech Power Holdings is a Motley Fool Rule Breakers selection. Berkshire Hathaway is a Motley Fool Inside Value recommendation and a Stock Advisor pick. Sasol is a Motley Fool Income Investor pick and a Motley Fool Global Gains selection. The Fool owns shares of Berkshire Hathaway. Try any of these Foolish newsletters today, free for 30 days. 

Fool contributor Matt Koppenheffer owns shares of Bank of America and Berkshire Hathaway, but does not own shares of any of the other companies mentioned. He is keeping a close eye on some of these stocks through his CAPS portfolio. You can also connect with Matt on Twitter @KoppTheFool. The Fool's disclosure policy thinks working like a dog seems like a great life -- especially if you're Matt's dog.

 


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