Israel-based Solaredge ($SEDG) designs, develops, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations.
The stock has shown its strength yesterday with a price increase in excess of 3% when most of the market was in red.
Its performance over the last year has been exceptional, with a peak of more than 200% and a current year-on-year capital appreciation of 148%. With this week’s move the stock is now trading above its 200 days moving average.
But the stock is not only about momentum as it still sports an attractive valuation with PEG (5 years expected) of 0,82.
Solaredge is benefitting from its digital technology in a sector still dominated by analogue devices.
Whether it is due to favorable regulation, like the recent one dictating that in California all new houses should be equipped with PV panels, or simply because switching to solar “makes perfect economic sense” to use the words of Tony Seba, Solaredge seems well positioned from riding the long wave of solar energy.
This stock is also an example of a way of investing in a company that enables the transition towards more sustainable energy resources.
Despite the recent drop following Q1 2018 #earnings, Applied Materials, $AMAT, still looks like an attractive investment idea.
The reported earnings show very good growth in both the top and the bottom line, however the analysts were put off by the guidance provided during the conference call.
From a valuation point of view, the stock still looks cheap with a PEG ratio (5 years expected) well below unity as you can appreciate from Yahoo Finance.
Now that the stock is trading below the 200 days moving area it may be a good idea to see whether and how this sudden drop is temporary or the start of a downtrend prior to initiating any position or accumulating.