Shares of solar manufacturer SunPower Corporation (NASDAQ: SPWR) jumped as much as 12.1% in trading Thursday as investors began speculating that solar tariffs may not be as bad as feared for the company. The stock even seemed to gain momentum throughout the day, moving higher through mid-afternoon and trading 11.3% higher at 3:50 p.m. EST.
Continue Reading Below
The Trump administration is considering what solar tariffs, if any, might look like, and rumors are leaking about those deliberations today. The latest rumor from Inside Trade is that Canada and Mexico would be excluded from any tariffs; this would help SunPower, which produces P-Series solar panels in both Mexico and China and assembles X-Series solar panels in Mexico.
We still don't know what the final tariff ruling will be or if solar cells imported into Mexico, but assembled into a solar panel there would be subject to tariffs. SunPower doesn't manufacture solar cells in Mexico -- it only assembles solar panels there -- so that would be an important detail to the company.
Buying on speculation like today's isn't a great idea because the news could change tomorrow. But an exemption for SunPower's facility in Mexico could be a best-case scenario because all of its solar panels coming into the U.S. are, or could be, assembled there. I remain bullish on SunPower's business long-term, but right now it's too early to judge whether or not solar tariffs would be detrimental or helpful to the stock.
10 stocks we like better than SunPowerWhen 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 January 2, 2018