Alternate Energy Sector Ideas

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First Solar - >>> 7 Best Energy Stocks to Ride Out Oil's Recovery


Kiplinger

by Aaron Levitt

May 12, 2020



https://finance.yahoo.com/news/7-best-energy-stocks-ride-201136371.html


Market value: $4.5 billion

Dividend yield: N/A

One of the biggest misconceptions is that solar energy and oil prices go hand in hand. As a result, when oil drops, solar stocks tend to plunge, too.

That's just silly. Petroleum-powered electric plants are a dying breed in the U.S., and currently comprise about half a percent of overall production. Solar now accounts for 1.8% and is assuredly on the rise.

But this misconstrued relationship could mean an opportunity for investors in leader First Solar (FSLR, $42.87).

First Solar not only makes high-efficiency panels, but it even builds and operates utility-scale solar plants. And while shares have declined 23% year-to-date, the company showed signs of resiliency in its first-quarter earnings. Revenues were marginally higher than in the year-ago period, and the company delivered a $90.7 million profit versus a $67.6 million loss. FSLR also recorded 1.1 gigawatts (direct current) of new net bookings for its Series 6 panels. That means utilities and installers still are looking out to the future despite the coronavirus' economic impact.

First Solar also boasts $1.6 billion in cash and marketable securities, and it's cash flow-positive. The company has provided limited guidance, but it says it plans on spending $450 million to $550 million in capital projects. That means without earning another dime, First Solar still has about three years' worth of working capital on its hands.

First Solar is the largest player in a growing field. And solar's tether to oil goes both ways, giving FSLR the potential to be one of the best energy stocks as oil prices recover.

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