Are These Really The Best Solar Stocks For Your Money?

A couple of months ago, FBR & Co. provided an update on the North American solar and wind markets. Analysts Aditya Satghare and Benjamin Tainter highlighted two Outperform-rated companies in particular: Canadian Solar Inc. CSIQ and Sunedison Inc SUNE. For Canadian Solar, the analysts provide a "sensitivity analysis examining multiple potential scenarios," while for Sunedison, they offer the reasons behind its addition to the firm's Top Picks list.

According to the report, "the project development pipeline remains large" in both the U.S. and Canada. The analysts see "multiple opportunities for acquisitions given the level of ownership by nonstrategic buyers in both operating and development projects." They also do not believe the recent fall in oil prices should have "a material impact on future solar and wind pipelines in the U.S."

FBR thinks that the recent pullback in Canadian Solar is unjustified, and thus, maintains its thesis and sum-of-the-parts analysis intact. Moreover, they have added a sensitivity analysis, "and the stock looks undervalued under several scenarios."

Regarding Sunedison, the firm believes "the potential for international growth, drop-downs into TerraForm Power, Inc. (TERP – Outperform), and the value creation potential of the "Yield Co." model are underestimated at the current price."