Here's a question for you…
Over the past year, what stock has performed the best in the S&P 500?
It's not Apple– only up 16%.
It's not Chipotle, although the stock has enjoyed a 57% rally.
It's not even Nvidia, which is up over 73%.
It's First Solar. Currently up 214% from one year ago.
| | | | First Solar began as a fairly scrappy company in 1999. They had 9 million dollars, but essentially all of that money went into their first facility.
From there, they turned their one facility into a multi-billion brand that was widely recognized as one of the top 50 most innovative companies in the world in 2011.
How?
Innovation. They were the first company in the world to create solar panels producing power at less than $1 per watt and they didn't stop their momentum. From 2007 to 2011, they increased their workforce to 7,000 people.
They also continued responding to the market as it adjusted.
For example, they moved away from rooftop installations, a major part of their business model which contributed to their growth to $137 million and beyond to well over $700 million a year in income and cut back on manufacturing when the market was oversaturated in 2011.
This did cause them to experience an operating loss of $68 million, but thanks to that sacrifice they didn't join other large solar companies in going under by 2012.
Instead, they rebounded, becoming the billion dollar company they are today by steadily climbing and innovating, both in their technology and distribution.
Thanks to their scrappy use of resources, First Solar is a multi-billion-dollar success in solar.
And First Solar is not alone.
Institutional capital is flooding into the solar space. The continued energy demands of an inflationary economy are giving these companies some serious tailwinds that can lead to cool profits for investors.
There's only one problem.
Solar hasn't solved its most major problems, which can be narrowed down to one resource: land.
Solar Needs Land That It Doesn't Have and Won't Be Allowed to Have
Solar needs an absurd amount of land for each project. Because as it turns out, "Green" energy isn't environmentally friendly.
That's because for solar and wind to be competitive, you have to clear hundreds of acres of forest.
And as you would expect, the Fed started to crack down on how much land these projects can use. To make matters worse, it's expensive. Because of that, the solar industry hasn't been able to reach its full potential.
First Solar even experienced this firsthand.
One of the reasons they had to move from creating roof panels is because their panels needed more space, but horizontal positioning was the only way to get the full benefits of their technology.
Solar hasn't solved its main problem, nor has a single panel come out that's the absolute end-all be-all panel, making investors excited at the prospect of choosing the company who innovates past this problem first..
Winners Rise from Solving Real Problems
Business spiels are always the same: identify the market, target a problem, and solve the problem. Even though it's repeated ad nauseam, it's true and will keep being true.
Companies that target a niche problem and solve it see the best results and can innovate off of that base to reach new customers.
We then later call those companies market leaders, but every single one started from humble beginnings, solving just one problem.
And there's a company doing just that in the solar space.
They've made the solar industry up to 90% more efficient, or in other words, 10x more efficient with their new technology. How'd they do it? Focus on one single problem: land.
The company's name is Three Sixty Solar and they use vertical towers so solar can create power vertically instead of horizontally.
One simple idea, along with some clever engineering to make sure the towers can withstand severe weather and get the optimal amount of sunlight, made themselves industry leaders.
But a tower might not sound too creative right? Simply creating a tower is something anybody can do, but, like First Solar, Three Sixty Solar is different.
What caught my eye about Three Sixty is their willingness to innovate both their product and their distribution.
They already signed distribution agreements that allow other companies to put their technology on the towers.
For example, they've already signed an agreement to turn some of the towers into cell towers and internet towers. From solar to a utility business in one lateral movement.
And they got creative with their distribution. They signed a deal with a subsidiary of Rustin Industries to get access to over 500 owners, sales operators, and merchants located across several markets.
They have the innovative spirit to survive a fairly competitive market.
They're the solar company to watch right now, even more so than First Solar.
| | | | Anthony S.
Energy Expert at Big Energy Profits
| | | | team1@hawkeyetraders.com
bigenergyprofits.com
Call us: (888) 233-8598
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