Please ensure Javascript is enabled for purposes of website accessibility

Why SolarEdge, Vivint Solar, Bloom Energy, and FuelCell Energy Stocks Surged Today

By Rich Smith - Apr 22, 2020 at 4:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Something that went down just went back up again. (And that "thing" is oil.)

What happened

What went way down earlier this week (oil prices, that is) are going back up today (also oil prices). Naturally, that's good news for oil stocks -- but it turns out it's pretty good news for alternatives to oil, as well.

In late-day trading, shares of solar stocks SolarEdge (SEDG 0.71%) and Vivint Solar (VSLR) are up 10.4% and 8.7%, respectively, as of 3:25 p.m. EDT. Likewise, fuel cell stocks are up, too, with FuelCell Energy (FCEL 3.48%) notching 8.5% gains, and Bloom Energy (BE 1.57%) rebounding 18.9%.

Four arrows pointing up

Image source: Getty Images.

So what

What's driving these stocks up? Eliminating the obvious choices first, it doesn't appear that there's any obvious stock-specific news behind any of these massive runs. In the cases of solar-inverter maker SolarEdge and solar-panel installer Vivint, there's no news whatsoever to explain why either stock should be worth 10% and 9% more today than they were worth yesterday.

FuelCell Energy issued a press release touting the beginning of commercial operations at its "SureSource 4000 fuel cell project located at Triangle Street in the city of Danbury, Connecticut." But no value was ascribed to the project -- and in any case, that press release is already more than a day old. 

Likewise, Bloom issued a press release describing the "rapid deployment of two fuel cell microgrids" in California -- again with no value ascribed. But again, this is yesterday's news. It certainly doesn't seem like the kind of thing to drive a near-19% gain in stock price for Bloom.

Now what

What does explain why these stocks are soaring?

Well, consider this: The price of WTI crude oil spiked 21% higher in Wednesday trading, and the price of Brent crude is up a healthy 7.5%. In each case, there are reasons for the increase -- the expiration of May-delivery oil futures contracts and bellicose statements from President Trump, issued in the direction of Iran.

Whatever the reasons, oil prices are rising, and whenever that happens, alternatives to oil become (relatively) more economically attractive. Investors' reactions in bidding up shares of alternative energy stocks in the solar and fuel cell sectors, therefore, does have some logic to it.

Personally, I question the logic of bidding up shares of unprofitable Bloom Energy more than profitable SolarEdge -- and bidding up unprofitable Vivint nearly as much. If you ask me, profitable companies are simply better investments than unprofitable ones.

If you're looking to join in on today's rally, of the four alternative energy stocks surging today, I think profitable and fast-growing SolarEdge is probably the best bet.

Rich Smith owns shares of SolarEdge Technologies. The Motley Fool recommends SolarEdge Technologies. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

FuelCell Energy, Inc. Stock Quote
FuelCell Energy, Inc.
FCEL
$5.06 (3.48%) $0.17
Bloom Energy Corporation Stock Quote
Bloom Energy Corporation
BE
$29.76 (1.57%) $0.46
Vivint Solar, Inc. Stock Quote
Vivint Solar, Inc.
VSLR
SolarEdge Technologies, Inc. Stock Quote
SolarEdge Technologies, Inc.
SEDG
$326.05 (0.71%) $2.31

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
390%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.