Election Week 2020 dragged on as of Thursday afternoon, and America still hadn't quite figured out who will be the next president. One thing we do seem to have figured out: We still like solar stocks.
At 11:50 a.m. EST today, shares of solar inverter producer SolarEdge Technologies (NASDAQ:SEDG) were up a solid 12.9%, while solar module maker Canadian Solar (NASDAQ:CSIQ) had gained 13.1%, and the stock of solar installer SunPower (NASDAQ:SPWR) was ahead by 16.7%.
Precisely why this is happening isn't clear. As my fellow Motley Fool contributor Travis Hoium pointed out yesterday, things are looking something less than sunny for Democrats, as hopes for a clean sweep of the House, Senate, and White House begin to dim, with the Senate looking like it will remain in Republican hands.
And yet, on the company-specific level, things do look propitious. SolarEdge stock sold off earlier this week despite reporting a huge earnings beat ($1.21 per share, where Wall Street had expected $0.82), as investors worried about fourth-quarter guidance. At nearly 67 times trailing earnings today, the stock still isn't cheap -- but it's a whole lot cheaper than it was a week ago, and that may be encouraging investors to buy back in. Indeed, on Tuesday, JPMorgan Chase told investors to do just that, saying the temporary price weakness is an entry point.
Likewise, SunPower had a wonderful report last week. It showed a smaller-than-expected pro forma loss and beat expectations with $0.24 per share in GAAP profits. The company predicted another profit in the fourth quarter and raised guidance for all of fiscal 2020 -- sparking a series of price target hikes on the stock across Wall Street.
Canadian Solar isn't expected to report earnings until Nov. 19. Still, with so many other solar stocks doing so well so far, chances look good for the company to exceed expectations as well. With analysts predicting that Canadian Solar will lose money for the quarter ($0.05 per share), the bar is already pretty low.
Investors today may be betting that Canadian Solar will clear that bar -- and they may be right.