Canadian Solar is the IBD Stock Of The Day as the manufacturer of solar modules is riding a wave of enthusiasm for solar energy stocks. CSIQ is near a buy point.
The company builds a range of modules for use in residential, commercial and industrial solar-power generation systems. Solar module shipments by the company jumped 62% during the quarter. It expects module shipments to grow 56% this year.
CSIQ stock has formed a cup-with-handle base with a buy point of 44.17. A trend line drawn over the handle's highs reveal an alternative entry around 42.
Based in the province of Ontario, Canadian Solar reported third-quarter results in November. Revenue jumped 57% from the year-ago period to $1.93 billion. It reported adjusted earnings of $1.12 a share, up 123%.
CSIQ stock initially jumped more than 3% Thursday, but retreated and ended the trading session down 0.3% to 41.90 on the stock market today.
CSIQ Stock: Drawing High Praise
Modules combine solar cells and wiring in a protective case. They are then wired together into a solar panel.
Consumer publication SolarReviews released its annual panel rankings on Feb. 1, elevating Canadian Solar and Q Cells to the top spots in the manufacturing of solar modules.
"We achieved a 123% increase in net income despite the headwinds from ongoing Covid-19 shutdowns and macroeconomic challenges," Chief Executive Shawn Qu said in a written statement with the earnings report.
Qu added: "We are also actively evaluating options in the U.S. market given the recent passing of the Inflation Reduction Act and its potential positive impact as another growth catalyst."
A Gold Mine For Solar Industry
The Inflation Reduction Act is a gold mine for the solar power industry and issues such as CSIQ stock. The act is packed with tax credits designed to expand solar industry manufacturing in the United States.
Further, the act kicks in $369 billion to expand renewable energy over the next 10 years, the largest spending plan for alternative energy in U.S. history. Also, solar energy stocks already were getting a boost from international agreements to slash carbon emissions to lessen the impact of global warming.
Further, economics are pushing renewables such as solar and wind energy to the fore, thanks to tax credits and cheaper equipment. According to the International Energy Agency, solar is now less expensive than natural gas and coal. Some analysts believe it's as much as 33% cheaper on a raw production basis.
CSIQ stock has an IBD Composite of 91 out of a possible 99.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
