If any specific industry has become the poster child for volatility, it is the clean technology sector. Short sellers target the stocks anytime there is an Asia-related hiccup, and some people still think that the sector is basically a pie-in-the-sky environmentalist pipe dream that will never achieve any sort of critical mass.
The fact of the matter is great steps in growth and technology have pushed the sector forward. A new research report from the analysts at Credit Suisse focuses on the fact that their index of clean technology stocks is down a monster 23.1% year-to-date. The Credit Suisse report had a near-term “stock heat map” that ranked stocks from less constructive to neutral to bullish. We focused on the bullish sector, and the five stocks rated Outperform at Credit Suisse.
Tesla Motors Inc. (NASDAQ: TSLA) is the electric car company that captivated momentum traders last year as the stock took off and has never looked back. The fact that somebody has finally made a commercial success of a high-dollar electric vehicle is a marketing and a technology breakthrough. Chairman Elon Musk recently was able to get Nevada Governor Brian Sandoval to sign into law a package of incentives for Tesla Motors worth up to $1.3 billion. The company is moving ahead with plans to build a $5 billion lithium battery factory expected to open in 2017 and employ 6,500 workers to make cheaper batteries so it can afford to mass market a new line of more affordable vehicles.
The Credit Suisse price target for Tesla stock is $325. The Thomson/First Call consensus is much lower at $264.17. Shares of the very volatile stock closed Monday down big, more than 9% at $253.86, after a Wall Street analyst said the stock has gone up too far too fast.
JinkoSolar Holding Co. Ltd. (NYSE: JKS) is a global leader in the solar industry with production operations in Jiangxi and Zhejiang Provinces in China and sales and marketing offices located around the world. The company has built a vertically integrated solar product value chain, with an integrated annual capacity of 2.0 gigawatts each for silicon ingots, wafers and solar cells and 2.1 gigawatts for solar modules. The company also sells electricity in China.
The Credit Suisse price target is posted at $45, and the consensus target on JinkoSolar is set lower at $37.93. Shares closed down on Monday at $31.93.
SolarCity Corp. (NASDAQ: SCTY) got hit hard earlier in the summer, but it has rallied back as we move toward the fall. The current price point may still be offering investors a very attractive entry. The company is a pure-play leader in the fast growth, roof-top solar as a service market. With many long-term contracts providing visibility into future cash flows, SolarCity is a top name for risk tolerant investors to own. Many on Wall Street feel that the company’s strong bookings announced during earnings will set the tone for continued strong installation growth.
The Credit Suisse price target for SolarCity is a large $97. The consensus target is at $85.36, and the stock ended Monday at $67.36 a share.
SunEdison Inc. (NYSE: SUNE) is a stock rated number one overall at Credit Suisse, and it was recently listed as one of the bank’s top new investment ideas. The Credit Suisse team points to continued positive risk-reward, especially after the company had a successful yieldco initial public offering to act as a positive catalyst. The company said recently it was embarking on a project to bring solar-power micro grids to rural India. SunEdison will build and operate the facilities and transfer them to a public entity after five years. The micro-grids will begin construction next month.
A blow-out earnings number recently also set a very positive tone for SunEdison. Credit Suisse has a big $34 price target, and the consensus target is $26.79. The stock closed Monday at $20.15.
BioAmber Inc. (NYSE: BIOA) is an industrial biotechnology company producing sustainable chemicals. Its proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstock into sustainable chemicals for use in a wide variety of everyday products including plastics, resins, food additives and personal care products.
The Credit Suisse price target for this small cap play is $20, and the consensus target is at $18.67. BioAmber stock closed trading on Monday at $11.51 a share.
Given the horrible underperformance of these top stocks this year, aggressive investors may want to direct some capital to these leading companies in the sector. When they do rebound, it could be fast and in a big way.