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Solar Stocks: What to buy right now

Posted January 29, 2008

"This year will undoubtedly turn out to be a transitional year for the solar industry. It will be the year when clear winners are chosen and losers are exiled." — Nick Hodge

by Nick Hodge, Green Chip Stocks

Baltimore – (TFN):  Solar stocks may go down in the short-term. There, I said it.

With that out of the way, let's analyze how lingering recession fears and an arsenal of overpriced solar stocks in a recession could provide savvy investors with a huge long-term upside.

The solar market, as a whole, has been on a joyride for the past year or so, with many stocks gaining value in the face of lackluster earnings and, in some cases, with lackluster products.

It seemed any company with solar or sun in the name was a sure bet. But now, all bets are off.

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This year will undoubtedly turn out to be a transitional year for the solar industry. It will be the year when clear winners are chosen and losers are exiled.

Don't get me wrong, solar, in general, is clearly a winning technology. But, right now, the playing field is simply too crowded. And until the field is leveled out, it will be harder for investors to rake in profits as they have been.

With that in mind, what will happen to solar stocks in the face of a recession?

First of all, a drop in oil demand that usually associated with recession will produce a corresponding negative effect in solar stock prices. And while the demand for oil will have absolutely no long-term affect on the solar industry, it could have a negative near-term influence.

Secondly, the solar industry has been weathering a silicon crunch for some time now. But as production expands, as it's doing now, manufacturers are seeing increased inventories. And that means decreased margins. Read on to learn which three solar stocks you should go long on right now.

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Posted by Nick Hodge · Filed Under Oil and Energy 

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