First Solar (FSLR) and Nextracker (NXT)

This is a follow-up to your “Retail Investors Crushed” video. I bought these two stocks earlier in the year based on what I perceived as tailwinds and also analysts’ 12-month target price. They have been pretty much losing ever since and I am pretty much convinced that I should sell. With the incoming U.S. administration being more into fossil fuels, do you see any hope on the horizon for U.S. renewable energy stocks? How do you think the incoming administration will effect Canadian renewables like Brookfield and Polaris?

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Asked on November 22, 2024 5:30 am

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First, 12 month price targets are generally useless. Numerous studies have highlight that only around 28%-30% of analyst price targets ever actually end up being accurate. So, with this low of a success rate, you can pretty much attribute the vast majority of those price targets being right to complete luck. The sooner you eliminate any sort of price target from your decision making, the better your decisions will be.

Being honest, both of these companies look solid. Strong margins, strong growth, strong backlogs.

I think if you bought at the start of the year, I don't think your analysis what bad whatsoever, you just ran into a situation where you paid too much. That doesn't necessarily mean the investments are not the best spot to hold the money moving forward.

A Republican party win no doubt hurts renewable companies as they're less inclined to spend money on the transition to cleaner energy. However, it is hard to say right now without any official policies released how large the impact will be.

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Posted by Dan Kent

Answered on November 22, 2024 12:27 pm

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Thanks for your response. I only started investing in individual stocks in April and thought, at the time, that all analysts were as thorough & honest as you. I have learned much thanks to Stocktrades and since came to the conclusion that a lot of the analysts' estimates were overly hopeful, but I didn't realize it was as bad as 30%. Yeesh! Anyway, after your answer, I have decided to wait a few more months and see what happens in the "first 100 days" of the new administration. If I keep investing in more solid stocks in the meantime, the price of these two stocks will become less of a drag on my overall rate of return should they really tank.

(c-ras@sympatico.ca at November 22, 2024 12:46 pm)

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