Why Shares of Canadian Solar Inc. Popped 24% in June

What happened 

Shares of solar manufacturer Canadian Solar Inc. (NASDAQ: CSIQ) jumped 24.3% in June, according to data provided by S&P Global Market Intelligence, as the solar industry's prospects seemed to get a little brighter.

So what 

First quarter financial results were released early in the month and weren't as bad as expected. Revenue rose slightly to $677.0 million, and on an adjusted basis net earnings were $6.0 million, or $0.10 per share. Analysts were only expecting $0.04 per share in earnings.

The better news is that solar panel prices are on the rise during the second quarter as U.S. and Chinese demand surges. U.S. installers are trying to get out ahead of potential tariffs, and Chinese demand is up because feed-in tariffs will adjust in the third quarter.

Now what 

Short-term the news is fairly positive, but investors shouldn't lose sight of the fact that Canadian Solar's scale hasn't led to any kind of profit advantage in the solar market. The company is barely breaking even in a high demand environment, and its $2.4 billion debt load is a big weight around long-term profitability. The third and fourth quarters are when we'll see if Canadian Solar can make money in a competitive solar market, and right now I have my doubts.

10 stocks we like better than Canadian SolarWhen 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 Canadian Solar 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 July 6, 2017

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.