Invesco Solar ETF (TAN - Free Report) topped the list of the best-performing ETFs so far this year with impressive returns of about 54%.
The rally was primarily driven by a rebound in global solar demand, competitive pricing and potential Chinese subsidies. Some states including California are using solar subsidies to boost the adoption of solar power. Additionally, California’s push to make solar panels indispensable to all new homes built in 2020 and beyond is bolstering the solar industry (read: 5 ETFs That Deserve Special Thanks in 2019).
The strongest-ever solar installation and the exemption of tariff on one type of solar panels also added to the upside. The U.S. trade representative relieved the bifacial solar panels from solar tariffs, which are currently 25% of the cost of imported solar panels. Higher oil prices are also contributing to the solar stock rally.
Let’s take a closer look at the fundamentals of TAN.
TAN in Focus
This ETF offers global exposure to the solar industry by tracking the MAC Global Solar Energy Index, holding 22 stocks in the basket. It is moderately concentrated across components, with each making up for not more than 10.1% of the assets. American firms dominate the fund’s portfolio with nearly 45.9% share, followed by China (24.5%) and Germany (9%). The product has amassed $399.8 million in its asset base and trades in solid volume of around 240,000 shares a day. It charges investors 70 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (see: all the Alternative Energy ETFs).
Though most of the stocks in the fund’s portfolio delivered strong returns, some stocks listed on the American stock exchange outperformed. Below, we have highlighted the five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best-Performing Stocks of TAN
Enphase Energy Inc. (ENPH - Free Report) : The stock has skyrocketed more than 413% in the year-to-date timeframe. It has seen positive earnings estimate revision of 10 cents for this year over the past three months with an expected earnings growth rate of 790%. ENPH currently has a Zacks Rank #3 (Hold) and a favorable VGM Score of B. The stock occupies the fourth position in the fund’s portfolio, making up for 7.2% share. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
SolarEdge Technologies Inc. (SEDG - Free Report) : The stock has surged nearly 146.5% in the same timeframe. It has a Zacks Rank #3 and a top VGM Score of A. It has seen positive earnings estimate revision of 13 cents for this year over the past three months and has an earnings growth rate of 27.8%. SolarEdge Technologies is the top firm, accounting for 10.1% share in TAN.
JinkoSolar Holding Company Limited (JKS - Free Report) : The stock has soared about 92% so far this year. It currently has a Zacks Rank #3 and an unattractive VGM Score of D. The stock has witnessed negative earnings estimate revisions of 31 cents in the past three months for this year and has an estimated earnings growth rate of 51.2%. It holds the twelfth spot in the fund’s basket with 4% of the total assets.
Vivint Solar Inc. (VSLR - Free Report) : This stock takes the sixteenth rank in the fund’s basket with 3.3% allocation. It has also delivered robust returns of nearly 92% so far this year. The Zacks Consensus Estimate for 2019 has moved south to a loss of 80 cents from a loss of 66 cents over the past three months for this year. Its earnings are likely to decline 515.4% this year. Vivint Solar has a Zacks Rank #3 and an unattractive VGM Score of F (read: Top-Performing Alternative Energy ETFs YTD).
DAQO New Energy Corp (DQ - Free Report) : This stock takes the #18 spot in the fund’s basket, claiming only 3.2% of the assets. It has jumped about 80% in the same timeframe and has seen positive earnings estimate revision of 11 cents for this year over the past 30 days. Its earnings are expected to decline 64.2% this year. DAQO New Energy is currently a Zacks #3 Ranked player and has a VGM Score of A.
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