Superstar Investors Name the Top Solar Stock

What a reversal. Down about 55% from $147 a barrel in July -- a premium that helped to create yet another quarter of huge profits for ExxonMobil (NYSE: XOM  ) and ConocoPhillips (NYSE: COP  ) -- oil prices have suddenly become reasonable again. And that's not exactly good news for green investors.

Nor is the latest data from the Commerce Department. The nation's gross domestic product fell 0.3% during the third quarter, the clearest sign yet that we're headed into recession. Can we really expect strapped consumers and pinched businesses to invest in alternatives such as solar at a time like this?

The Feds are. The bailout bill included a solar tax credit that's now law. Good. As much black gold as remains to be extracted, the oil market's mood swings over the past year have been at best annoying (i.e., higher food and gas prices) and at worst calamitous (i.e., sharply reduced consumer spending leading to an economic slowdown). Don't we need alternatives to help stabilize our far-too-fragile economy?

It's a question that's at least worth asking. And if it's worth asking, it's also worth having a look at the top solar stocks in our 120,000-strong Motley Fool CAPS database. Here are their five favorite solar stocks right now:

Top Solar Stocks

Recent Price

CAPS Stars (out of 5)

1-Year Return

AXT Inc.

$1.50

*****

(67.7%)

Amtech Systems

$6.20

*****

(63.7%)

ReneSola (NYSE: SOL  )

$5.96

*****

(54.1%)^

FPL Group (NYSE: FPL  )

$47.30

*****

(27.4%)

Yingli Green Energy (NYSE: YGE  )

$4.97

*****

(86.9%)

Source: CAPS, Yahoo! Finance. ^ Return from Jan. 29 IPO.

"X" marks the sunspot
Are solar investors bargain hunters? It sure looks like it from our table. AXT, the second-largest decliner, gets the top rating. But that could be a function of its price. Stocks become unratable in CAPS once they fall below $100 million in market cap or $1.00 per share. AXT commands roughly $40 million in market value as of this writing. The last CAPS rating for AXT, an "outperform" call, was made on Sept. 8.

So we don't really know if investors still like AXT at today's prices. We can be far more certain about Suntech Power (NYSE: STP  ) , a Motley Fool Rule Breakers recommendation that has a huge following in CAPS, where it earns four stars:

Metric

Suntech Power

CAPS stars (5 max)

*****

Total ratings

3,962

Bullish ratings

3,843

Percent Bulls

97%

Bearish ratings

119

Percent Bears

3%

Bullish pitches

656

Bearish pitches

29

Note: Data current as of Oct. 31, 2008.

Most of our rebel investors love China's Suntech because it's a low-cost manufacturer and supplier of solar cells that's positioning itself to triple its U.S. sales next year. But not everyone is convinced.

"Unless something radically changes with silicon efficiency technology, this is priced to high and the industry cannot deliver the expected results," wrote CAPS All-Star firenze1 two weeks ago.

Investor tylerfu agrees. "Good luck with Chinese solar power, in the short term as oil and economy both fall the need for renewable energy in China will fall as well."

And yet the solar bulls continue to run -- bulls like CAPS investor rosborneutah. "STP is solidly entrenched in the world's largest industrial and consumer market (uhhh, China), and has committed to furthering growth in the U.S. While the current drop in oil prices may detract from the urgency of alternative energy solutions, the solar/wind/geothermal industry has caught momentum and will build over the next few years."

Agreed, but I'm interested to know what you think. Would you buy Suntech Power at today's prices? What about First Solar (Nasdaq: FSLR  ) , which is expanding margins and producing free cash flow even in the face of massive capital outlays? Let us know by signing up for CAPS today. It's 100% free to participate. And check out Fool Jim Gillies' take on First Solar; it's got him shaking in his boots.

Shine your light on related Foolishness:

Fool contributor Tim Beyers recently returned from a tour of Silicon Valley with his Motley Fool Rule Breakers teammates, during which they visited more than a dozen established and emerging innovators. Care to learn more? Just tell us where to send you our updates. It's 100% free.

Tim didn't have positions in any of the stocks mentioned in this article at the time of publication. Suntech Power is a Rule Breakers recommendation. The Motley Fool's disclosure policy wishes your portfolio a safe and spooky Halloween.


Read/Post Comments (5) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 31, 2008, at 5:35 PM, Borisbmx wrote:

    Suntech power has the lead in silicon solar for now as measured by total sales and cost per watt and i would buy the shares in anticipation of a clean energy buildout that last for a few years. They need to work on their thin film evolution more and detail what's the plan with the contracted $10 billion silicon material stockpile.

  • Report this Comment On October 31, 2008, at 6:15 PM, ToontjeLager wrote:

    Germany already went for a (hard fought) fundamental shift in the paradigm by way of the 'feed-in' tarrif, no subsidies required. The experience there proves that solar is sound, truly disruptive and maturing quickly.

    Anyone have (investor) views on PV vs CSP and what that means for STP?

  • Report this Comment On October 31, 2008, at 6:17 PM, ToontjeLager wrote:

    Germany already went for a (hard fought) fundamental shift in the paradigm by way of 'feed-in tariff' legislation, no subsidies required. The experience there proves that solar is sound, truly disruptive and maturing quickly.

    Anyone have (investor) views on PV vs CSP and what that means for STP?

  • Report this Comment On October 31, 2008, at 10:01 PM, Dadw5boys wrote:

    Wind power solar combos are best for individuals homeowners. I am going with YGE who makes very good wind generators the come with inverters already installed. No extra equipment to buy for the homeowers. They combine the wnd benerators with solar and power cell towers all over China for xing.

  • Report this Comment On November 06, 2008, at 6:36 PM, javnnf wrote:

    The link for the Rule Breaker article in reference to STP has no information about STP but about Cloud Computing :

    [We can be far more certain about Suntech Power (NYSE: STP), a Motley Fool Rule Breakers recommendation that has a huge following in CAPS, ...]

    Is this just a mistake or intentional?

    Here is the URL referred to:

    http://www.fool.com/shop/newsletters/15/index.htm?source=irb...

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