If you want a preview of what’s coming with respect to the solar revolution, look no further than this past fall.
If you recall, oil prices soared for much of 2018 and then peaked in November near $70. Most of that increase came thanks to the strong dollar and the U.S. Federal Reserve lifting interest rates.
Along with the climb in crude prices came the obligatory bump in the prices of solar stocks.
Well, it wasn’t exactly a bump.
It was more like a rocket ship igniting.
In a few short months, many of the top solar stocks jumped 50% or more in value.
Unfortunately, the rally didn’t last.
One rate hike too many at the end of the year, and a market rally in bonds ensued. That caused the long bond to collapse, which took the dollar down too.
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As the dollar fell, crude oil prices dropped, and traders locked in their profits on solar stocks.
Add in a little extra bear market selling, and those 50% gains quickly became 20% losses.
Of course, we’ve seen this act in solar stocks before.
A few years back, there was a big rally in solar stocks as oil prices traded above $100 per barrel.
At that time, the solar industry was in the earlier stages of development. As with any new technology, that can mean a lot of investment followed by a lot of losses.
Still, investors were unconcerned.
Prices on solar stocks traded for three to four times where they trade today.
Since then, there have been major developments in the solar industry.
For starters, green initiatives have been a huge boost for solar businesses.
And those initiatives will only continue in 2019.
For example, solar is now the most inexpensive way to power a home according to Solar Estimate.
In the middle of 2018, industry estimates said there would be 2 million solar instillations in U.S. homes. That number is expected to double in the next four years.
That type of growth is just what’s needed to propel solar stocks higher in 2019 and beyond.
When combined with a macroeconomic environment of rising interest rates and a stronger dollar, what do you think is going to happen to solar stocks?
They are going to move higher, if history is to be repeated.
Over the long term, that appreciation could be two or three times an investment made today.
So just what solar stocks should we be looking to buy?
The market is off to a great start in 2019, but is it a dead cat bounce?
That’s where the macro story comes into play.
The economy is doing quite well, as evidenced by the blowout jobs number last week.
Thanks to inflationary pressures with wages and higher commodity prices, the yield curve will steepen.
King dollar will roar in 2019.
When it comes to solar stock, the best investment will be with those stocks best positioned to profit from green initiatives. For me, that looks like companies focused on solar installations. In addition, higher oil prices will provide additional propellant to lift these stocks higher.
It is clear to me that investing in a pure play solar installation name is the way to go.
Here’s our top small-cap solar stock to buy now for massive gains…
This Is the Best Small-Cap Solar Stock to Buy in 2019
The company owns and installs solar systems to residential, commercial, and industrial customers in the United States.
Vivint was founded in 2011, which makes it a maturing solar stock.
Back in 2014, on the strength of $100 crude, shares of VSLR traded for over $15 per share.
Today, the stock sits just below $4 per share.
In 2018, Vivint jumped as crude rose in the first three quarters of the year, peaking at just under $6 per share.
Earnings wise, Vivint is losing money, so that can be disconcerting. It most certainly explains the penny-stock nature of the company when shares trade below $5 per share.
The good news is revenue is growing at a solid clip. Analysts expect the company to move from $291 million in sales in 2018 to $331 million in 2019, a 14% improvement.
A move from $4 to $6 in 2019 seems as close to a sure thing as you can get in this market.
If things go really well and crude jumps again to $100 per barrel, Vivint will likely trade over $10 per share just as it did in 2014.
The only difference is the company will be more mature and closer to profitability.
That’s a stock to own in any portfolio.
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Right now, solar power occupies just a tiny niche of the global energy market – less than 1%. But a massive wave of new wealth is about to be unleashed that could be yours for the taking.
See, California just passed a mandate requiring all new homes built after 2020 to include solar panel installations. And our energy expert, Dr. Kent Moors, has uncovered the one company at the heart of this solar revolution.
With over 200 patents protecting its market share, it’s no surprise that it’s positioned for a potential 80,000% sales surge.
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