Top Stock Picks for 2021: First Solar
Every day for the next two weeks, we're going to highlight one of Schaeffer's top 14 picks for 2021. Up today is a 2020 darling that could have an even bigger 2021. To access the entirety of the 2021 report, click here.
Alternative energy concern First Solar Inc. (NASDAQ:FSLR) emerged as a strong performer in 2020, and closed out the year with a 76.8% year-to-date gain. Even better news is that the solar stock is already bouncing off its 50-day moving average, and the solar panel manufacturer will remain in the spotlight with President Biden in office, with the new administration expected to favor the renewable energy industry over the next four years.
What’s more, declining short interest has acted as a tailwind since the security’s March 18, three-year low of $28.47. And given that 8.9% of the stock’s available float is still sold short, traders are likely to continue hitting the exits going forward. In fact, short interest has already dropped 3.5% during the past two reporting periods.
Meanwhile, analysts are pessimistic toward the security, with eight of the 12 in coverage carrying a tepid "hold" or worse rating, and four sporting a "strong buy." Should some of this negative attention begin to fade, it could give the security a boost. An unwinding of bearish bets in the options pits may also propel the security higher. This is per FSLR’s 50-day put/call volume ratio at the ISE/CBOE/PHLX, which sits higher than 90% of readings from the past year.
Tony Venosa, CMT, is a Senior Options Strategist at Schaeffer's Investment Research. He's has over 20 years of trading experience under his belt -- including a stint in the mid-'90s clerking in the S&P 500 trading pits in Chicago, plus time spent as a commodity broker and proprietary day trader. A graduate of Miami University with a B.S. in finance and decision sciences, Venosa earned his Chartered Market Technician designation in 2008, and has been part of Schaeffer's in-house research team since 2010.
