4 Alternative Energy Stocks

The one good thing about stocks crashing in 2008 and 2009 was the huge decline in energy prices. But now that the market has rebounded and sentiment has turned optimistic, energy is saying, 'Not So Fast!'

Crude began accelerating in early March with equities as investors began to anticipate stronger energy demand on the back of an economic recovery. Oil is now perched above $70 a barrel, which only a few years ago was considered almost unthinkable. Prices at the pump have followed suit, with gasoline trending higher for 53 consecutive days at one point during spring and early summer.

Alternative Energy Strikes Back

So now that crude and gasoline prices are on the upswing, talk of alternative energy has once again moved into the spotlight. Alternative energy has been a hot investment destination over the last few years for investors chasing the next big thing. It has led to a lot of volatility in individual stocks and some pretty ridiculous valuations.

I spent some time scouring the Zacks Rank landscape this week looking for some solid alternative energy stocks from different segments of the market that offer an attractive combination of growth and value. Below are a few stocks that caught my attention, take a look.

4 Excellent Alternative Energy Stocks

Fuel Systems Solutions Inc. (FSYS - Snapshot Report) develops alternative fuel system components worldwide. The company's products are used to build engines that run on natural gas and propane. FSYS has been on a tear since bottoming out below $10 in early March, having since crossed the $30 mark. The company's Q2 results, reported on August 6th, were excellent, blowing past the Zacks Consensus Estimate with earnings of 46 cents per share. The current-year estimate is up 24 cents in the last 3 months to $1.63 per share, while the next-year estimate is projecting 20% earnings growth. With a P/E multiple of 19X current-year earnings, FSYS is attractively valued relative to its bullish growth projection. Take a look below.

Canadian Solar Inc. (CSIQ - Analyst Report) develops and manufactures solar panels. Solar stocks have a history of being pricey, but CSIQ offers both value investors a healthy does of value to go along with the bullish growth projection. The company posted impressive Q2 results on August 6 that handily beat the Zacks Consensus Estimate. Estimates have been screaming higher for the last few months, with the current-year estimate up from a loss of 9 cents to $1.03 per share. The company has also launched a program to sharply cut its production costs to help counter short-term revenue volatility.

USEC Inc. (USU - Snapshot Report) is a supplier of low enriched uranium for commercial power plants worldwide. Nuclear power and nuclear facilities have fallen back into favor over the last couple years because of the massive quantity of clean energy they can produce. Safety has also greatly improved, quelling fear of the unexpected. USEC looks well positioned to capitalize on that movement. The company's share price looks reasonably valued, trading at 12X current-year earnings. Take a look at the multi-yr low in the chart below.

Trina Solar Ltd. (TSL - Snapshot Report) is a solar module developer operating out of China, providing some international flavor to the solar conversation. Amazingly, this stock looks very reasonable priced, trading with a P/E multiple of 14X, a nice discount to the overall market with a very bullish next-year growth projection of 46%. Shares have been locked into a nice trend for the last few months, take a look below.

Conclusion

Alternative energy stocks are going to be volatile as revenues and investor sentiment bounce up and down. But by focusing on the company's with the most attractive valuations and best business models, investors can provide their portfolios with a nice helping of an industry with amazing long-term growth potential.

Read the full analyst report on USU

Read the full analyst report on TSI

Read the full analyst report on FSYS

Read the full analyst report on CSIQ