Why SunPower Corporation's Shares Popped 16% Today

Markets Motley Fool

What happened 

Continue Reading Below

Shares of SunPower Corporation (NASDAQ: SPWR) jumped as much as 15.7% in trading Monday after getting a big upgrade from an analyst at Baird. At 1:55 p.m. EST, shares were still up 12.3%, and a few positive trends could keep shares moving higher. 

So what

Baird analyst Ben Kallo upgraded shares of SunPower from neutral to outperform and increased his price target by $3 to $10 per share. He indicated that a ramp-up in P-Series production and the sale of 8point3 Energy Partners (NASDAQ: CAFD) could drive shares higher. 

The other notable news item today was an offer by Canadian Solar's (NASDAQ: CSIQ) CEO to take the company private. This follows JA Solar, Trina Solar, and Renesola all either being taken private or agreeing to a deal recently. It's another indication that executives think the industry is undervalued, and they're willing to put their money where their mouth is. 

Now what

Continue Reading Below

The upgrade is a positive data point for investors who are bullish on SunPower (like myself), but buying on an upgrade alone isn't a good move. What investors should look for in the next few months is an actual announcement that SunPower is selling its stake in 8point3 Energy Partners, the sale of projects being developed in Mexico, and signed contracts for P-Series solar panel sales. If those three things come together, SunPower's stock could continue today's surge. But there's been hype around the company before -- and investors should look for concrete improvements rather than speculation given past disappointments. 

10 stocks we like better than SunPower
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and SunPower wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of December 4, 2017

Travis Hoium owns shares of 8point3 Energy Partners and SunPower. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.