Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Across the board solar stocks were up today, most notably SunPower (NASDAQ:SPWR), which is up 14%.
So what: GTM Research, one of the leading solar research firms, released a report on the U.S. residential solar financing industry and predicts it will grow from $1.2 billion last year to $5.7 billion in 2016. There was also a report in the Financial Times that suggested that the industry may be close to creating bonds that cluster small installations into securities and generate cash flow from the electricity generated.
Now what: Neither of these items is really earth-shattering, but they show just how wildly the market can react on news it should have seen coming. SunPower, SolarCity (NASDAQ:SCTY.DL), and other installers have bundled and sold small residential and commercial projects for years, so bonds are the next step for these companies. First Solar (NASDAQ:FSLR) has been selling entire projects, although it could see a small benefit from the lower cost bonds would bring.
I see this as another step forward for the industry, and it's another example why long-term investors need to stay invested or risk missing days like this. Bonds are inevitable, and so are structures like REITs or MLPs, and on random days when rumors emerge about these structures, stocks pop. I'm a long-term bull for solar, and I think SunPower is the best pick, followed by First Solar, and investors should stay long despite the roller coaster the stocks can find themselves on from time to time. I think both move higher as positive news emerges from the industry week after week.