It's no surprise that international stocks have gained popularity with investors over the past few years. They've generated absolutely amazing growth.
For the sixth year in a row, the Vanguard Total International Stock Market Index outpaced the Vanguard Total Stock Market Index. The latter tracks the broad U.S. market, including top holdings in Cisco
Even though foreign markets probably won't outperform U.S. markets every year, international stocks are undeniably worth your time to research. And thanks to American Depositary Receipts (ADRs), U.S. investors have more opportunities than ever to trade foreign securities on domestic exchanges.
This month's best performances
Foreign companies that participate in an ADR program must file reports in accordance with U.S. regulations, but their different corporate cultures and business decisions can seem unorthodox to American investors.
To help us understand this month's top-performing ADRs, we'll tap the expertise of more than 97,000 investors participating in Motley Fool CAPS, the Fool's free investing community. Here are some of the past month's top-performing ADRs, along with their ratings from the CAPS community.
|
Company |
% Change |
CAPS Rating
|
|---|---|---|
|
JA Solar Holdings |
71.8% |
**** |
|
Suntech Power |
53.3% |
***** |
|
Chemical & Mining Co. of Chile |
44.4% |
***** |
|
Xinyuan Real Estate |
43.9% |
**** |
|
LDK Solar |
42.5% |
**** |
Remember, I chose these stocks as jumping-off points for further research, not formal recommendations. That said, the CAPS four- and five-star ratings for stocks such as these are an effective tool for investors.
Scorching hot solar
2008 started off terribly for solar stocks, but CAPS investors remained confident in solar's long-term potential -- a bet that seems to be paying off this month, despite mixed results from SunPower's
While solar cell technology is undeniably innovative and fascinating, is it a viable and cost effective alternative to fossil fuels? That's the trillion-dollar question.
As my colleague Toby Shute aptly noted in a February article on the solar industry: "Each management team in the space has its favorite cost metric, which invariably casts the company as the most competitive coal-slayer of the near future... It bears repeating that solar's Holy Grail is 'grid parity,' or achieving costs per kilowatt-hour on par with fossil fuel-derived electricity."
With fossil fuel prices as high as they are, solar's job of making economic sense to companies and consumers is that much easier. However, as with other forms of alternative energy, mainstream acceptance of solar power has its obstacles, including the aesthetic placement of the cells within communities, and a region's amount of annual sunlight.
A CAPS pitch from abitarecatania similarly calls into question the efficacy of solar power in general, and SunPower in specific:
1. Solar is stupid it will fail like it did in the 70s. It is as practical as using corn to fuel your gas guzzling SUV.
2. Global warming is about carbon trading exchange. The dumbest political "fear football" since Y2K.
3. You have no idea at all what this company really does. Right? Seriously, you are just gambling. Right?
On the other hand, solar bulls are themselves a vocal group, including marc64, who recently noted that solar has some friends in high places. Here's an excerpt from this player's pitch for Suntech Power:
The solar panel market has other important, demand-side, friends: solar enjoys hearty governmental subsidies in several rich countries, and widespread political support from anyone looking for symbolic and real ways to reduce carbon emissions. While the rigorous strategic economics and environmental arguments are still somewhat weak, nevertheless the "global climate change" concern tips the balance making this decision easy sell to large groups of people. Support extends to some really big business buyers yearning to be green.
In this Fool's opinion, investors without a lot of volatility tolerance should avoid solar stocks altogether. Over the past few years, solar's ride has been bumpy, and an anxious investor could easily fall into the trap of overtrading, selling low and buying high. If you're ready to jump into solar stocks and have a steady hand, it's important to look for the solar companies with the healthiest financial situations and the best long-term competitive advantages.
CAPS can help you get started on that path. Read what other investors have to say about solar, and then make your voice heard on Motley Fool CAPS. It's 100% free, so sign up today!
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