The Big Solar Debate: SolarEdge Stock Vs Enphase Stock
A surprisingly large number of retail investors ask Google which stock is the best to own. The response is about as predictable as asking the barber if you need a haircut. Any number of pundits out there will tell you which stocks they think you ought to buy. What most lack is a methodology to find which stocks are the most desirable to hold for any given investment thesis. Using solar as an example, here’s how we set about finding the best solar stocks to own from the perspective of a risk-averse investor.
- Find a subject matter expert who ranks investable solar stocks by revenue exposure
- Remove any stocks that present too much risk (a large exposure to California solar legislation, a variable interest entity structure, a David vs. Goliath business, etc.)
- Take the remaining names and try to find out which is the most compelling
We’ve already accomplished the first two bullet points in our piece on The 10 Biggest Solar Stocks in the World which looked at how solar presents a very compelling renewable energy thesis, even more so than wind. The only solar ETF out there – the Invesco Solar ETF (TAN) – tracks a “global passive solar energy index of qualified solar stocks.” The word “passive” is important to note because that means the index isn’t trying to select which solar stocks will outperform, it simply selects companies with the most exposure to solar revenues. Then you have “active
