The S&P 500 closed at a record high of 5,859.85 yesterday, highlighting strong bullish momentum in the market. Investor sentiment remains optimistic, bolstered by positive job reports and the Fed’s recent shift towards cutting interest rates. With the end of the year fast approaching, there’s still time for investors to capitalize on the ongoing buying frenzy.
The key to success, however, lies in finding the right stocks to buy. And that’s where the Smart Score comes in. This AI-powered data parsing tool uses natural language algorithms to collate the aggregate information tossed up by the stock market – the collective wisdom, if you will, of thousands of traders dealing in thousands of stocks for tens of millions of daily transactions. The Smart Score uses that data to rate every stock on a simple scale of 1 to 10, according to a set of factors proven by past performance to indicate future outperformance.
While the Smart Score is no crystal ball, seeing into the future, it does give a guide for investors – and the ‘Perfect 10’ stocks clearly deserve a closer look.
We’ve opened up the TipRanks database and found two of those top-scoring ‘Perfect 10’ stocks – stocks that shine across the board and bring solid opportunity to investors. Here are the details, along with comments from the Street’s analysts.
First Solar, Inc. (FSLR)
We’ll start with First Solar, one of the leaders in the US solar power industry. The company got started in 1999, and is now an important producer of photovoltaic panels, the basic infrastructure of any solar installation. The company is the leading US producer of such panels, and holds an important international position in the solar power market.
First Solar currently has approximately 25 gigawatts of installed generation capacity, and is on track to have 26 gigawatts by 2026. The company has spent a cumulative $1.5 billion on research and development in solar power technology, and is the largest producer of photovoltaic technology. First Solar is known as an innovator, and its cadmium telluride technology is considered an advance over conventional silicon panels, and is a benchmark for panel quality.
In addition to its position as a technological leader, First Solar is also committed to providing American jobs. The company is on track to directly support more than 3,000 jobs in four states by next year, and has a manufacturing footprint totaling more than 6.5 million square feet.
On the financial side, First Solar reported sound results in its last quarterly report, for 2Q24. The second quarter’s top line came in at $1 billion, more than $66 million ahead of the forecast – and up 23% year-over-year. The company’s bottom line of $3.25 per share was 54 cents per share better than had been expected. First Solar finished the quarter with $1.2 billion in its net cash balance, and had a sales backlog totaling 75.9 gigawatts – indicating plenty of work ahead for the solar firm.
For Truist analyst Jordan Levy, all of this adds up to a solid choice for investors. The analyst particularly notes the company’s technological and R&D advantages, writing, “We see FSLR’s differentiated technology, continued investment in R&D, and sizable contracted backlog further securing the company’s competitive moat both for current and future module technology iterations. Ultimately, while broader utility-scale solar dynamics remain volatile, FSLR in our view offers investors the LT attractive growth profile of the sector particularly when paired w/tailwinds of data-center driven power demand, without much of the near-term noise.”
Levy goes on to rate FSLR as a Buy, with a $300 price target that indicates room for a one-year upside of 43%. (To watch Levy’s track record, click here)
Overall, First Solar has earned a Strong Buy analyst consensus rating, based on 23 recent recommendations that include 20 Buys and just 3 Holds. The shares are trading for $209.96 and their $290.21 average target price points toward a gain of 38% in the next 12 months. (See FSLR stock forecast)
Clearway Energy (CWEN)
Next on our list is Clearway Energy, an owner/developer of clean energy assets in the US, and a leader in the global green energy transition. The company holds a portfolio of power generation assets totaling some 2.4 gigawatts of capacity, located across 26 states. This portfolio includes 9 gigawatts of wind and solar generation plus energy storage, and more than 2.4 gigawatts of dispatchable power generation designed to protect grid reliability.
Clearway has a large footprint along the Atlantic seaboard region, from New Jersey to New Hampshire, as well as in Illinois, Minnesota, Texas, and California. The company’s assets include commercial-scale wind farms operating in 13 states, and similar solar projects in 19 states. Clearway also owns 12 gigawatts of battery storage, with operations, including deployment and development, in 17 states.
In addition to its clean energy projects, Clearway also owns 2.5 gigawatts of conventional power generation facilities. These are six gas-fired power plants located in California and Connecticut. Clearway has 100% ownership of the four California plants, and a 50% stake in each of the two Connecticut plants.
The company uses its portfolio position to provide its investors with a solid dividend income, that is both stable and growing. In August, Clearway announced a 1.7% increase to its dividend payment, bringing the common share payment to $0.4171. At the annualized rate of $1.67 per common share, the dividend gives a forward yield of 6%.
This stock is covered by Jefferies analyst Julien Dumoulin-Smith, who is impressed by Clearway’s dividend policy, and the company’s strong portfolio. He writes, “CWEN is one of the last YieldCos standing and has developed a track record of consistently growing dividends through small, sensible asset dropdowns funded conservatively. This is supported by strong fundamentals, including a 9 GW portfolio that’s well diversified geographically and by asset, as well as the support of a committed sponsor with a robust project pipeline.”
“Overall,” Dumoulin-Smith went on to add, “we think this gives the company’s growth trajectory superior credibility vs. peers in the volatile YieldCo sector, which ultimately translates into a lower cost of capital and better access to capital, resulting in a growth-inducing virtuous cycle.”
Conveying his confidence, Dumoulin-Smith rates CWEN a Buy, and his $35 price target suggests the stock will gain 26% on the one-year horizon. (To watch Dumoulin-Smith’s track record, click here)
This is another stock with a Strong Buy consensus rating, this one based on 7 unanimously positive analyst reviews. The shares are priced at $27.81 and their $34 average price target implies a one-year upside potential of 22%. (See Clearway’s stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
