Buy Solar Before 2015

This is the time of year when investors are easily distracted.

For too many years, I myself gave in to the holiday rush and ignored my portfolio.

And I have to admit I’ve therefore passed up many a bargain. I learned my lesson the hard way, so I’m asking you to not make the same mistake.

This year, I want you to pay attention to opportunities that will not wait for the new year, because right now we’re looking at a rare opportunity to pick up a few select solar companies at prices we may never see again.

Oddly enough, it has to do with oil.

Oil prices are down! It’s big news. Some investors think that’s a good thing — lower prices at the pump. Others fear it will actually undermine a delicately balanced world economy and offer no true net gain to anyone. Whatever. It’s all a distraction, a lot of noise. It just makes it more difficult to see the real opportunities in the market.

The drop in oil prices has given us a holiday gift far greater than cheap gasoline.

It has given us cheap solar stocks.

Oil is dragging down all energy stocks, including solar companies, which is absolutely crazy, because oil is used in automobiles and airplanes. Oil is used in transportation. But very little oil is burned to make electricity.

Yes, a drop in oil can force down natural gas prices, which should affect electricity rates. But give me a break. Please, write me if you ever see your electric rates go down. It doesn’t happen. It has never happened. Electricity is dependent on coal prices. And the cost of producing electricity is not going down no matter what oil is selling for.

But the arbitrage possibility here — the imbalance in the market that savvy investors see — is the simultaneous takedown of solar stocks. Remember: Solar-produced electricity, including the electricity from panels that are now on more than half a billion American houses, is below the grid price of electricity in 17 states, and it’s getting more efficient all the time. Yes, it’s cheaper to make electricity from solar panels than to make it from coal.

Several weeks ago, an analyst for Deutsche Bank quietly wrote to insiders that oil prices should not have the impact they have had on solar stocks. He doubts U.S. electricity prices will drop, and he sees a strong market for solar continuing in China, the world’s largest solar producer and user, as well as the United States and India.

The amount of electricity produced from solar panels is doubling every two years. And it’s only going to accelerate. Meanwhile, you can profit handsomely from this market stupidity.

I’ve got my eye on one company in particular that’s drastically mispriced.

I’m not looking to get into this company to trade it overnight. It’s a keeper.

My Breakthrough Technology Alert readers know that we are not traders. We are patient capital.

And even if the price of this solar company were to correct overnight and shoot up 50%, we wouldn’t sell it if management stayed on the same high-growth, innovation-based strategy it has used.

We buy companies that will change the world, and we buy them long before others see their value. Then we hold onto them for a long ride to success.

So far, the ride is proving quite prosperous.

In the last 14 months, readers of Breakthrough Technology Alert have received 13 new recommendations.

The portfolio is up about 50%. Those who invested $10,000 in each stock each month when I recommended it over the past year or so now have about $200,000 in their portfolios.

Of course, I am far from perfect. I expect to generate a few losers.

The secret of success is to have enough big winners to compensate for the losers.

And I expect a few well-chosen solar companies to become big winners.

Take the company we are following now.

This company is the leader in high-efficiency panels and systems for creating and managing solar power plants. It has by far the most efficient panels on the market, and it continues to improve its systems — now offering ingenious mirrors that focus on panels to increase the amount of sunlight that hits them.

And this company’s panels last. They guarantee that owners will get at least 87% of the power that the new panels produce for at least 25 years.

But that’s just one reason I like this company.

Their philosophy is to lead the industry with innovation. Nearly every other company is trying to copy its ideas.

And the company is a world force — it operates and builds in 35 countries. Unlike other solar companies, it can afford to take risks and invest in research because its biggest owner has deep pockets. One of the five largest oil companies in the world owns 66% of this company’s shares. The other four largest oil companies seem to be ignoring solar. Want to bet which one has a better handle on the future?

The company I’m following is sold out of its manufacturing capacity for at least the next year. That’s an enviable position to be in. But this company has a grasp on its own future growth and is completing two new fabrication plants — one that will come online in early 2015 and another in 2016. Meanwhile, the company has orders to build 10 gigawatts of power plants (the equivalent of 10 of the largest power plants in the United States) and has more than 300 projects in the works around the world.

And its unobvious secret? This company plans to triple its capacity within five years.

This is a remarkable growth story, and it is going to pay off.

The stock’s fair value is more than 40% of what it’s selling for right now. Now, while everyone is distracted by falling oil prices, is the time to buy it.


Stephen Petranek
for The Daily Reckoning

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Stephen Petranek

Stephen Petranek’s career of over 40 years in the publishing world is marked by numerous prizes and awards for excellent writing on science, nature, technology, politics, economics and more. He has been editor-in-chief of the Miami Herald’s prestigious Sunday magazine, Tropic, and has covered a wide range of topics for Time Inc.’s Life magazine. His...

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