Red-Hot Solar Stock Earns 'Top Pick' Status

Quarter-to-date, SEDG has added more than 37%

Digital Content Manager

Dec 19, 2022 at 10:08 AM

Goldman Sachs is betting on the solar energy industry. The brokerage named SolarEdge Technologies Inc (NASDAQ:SEDG) as one of its top picks for 2023 alongside sector peer First Solar (FSLR). That's notable because the majority of analysts are already optimistic on SEDG, with 14 calling it a "buy" or better, while five still say "hold."

Nevertheless, the stock was last seen down 1.1% at $315.45. The $340 region capped the shares' 37% gain this quarter. The solar stock also boasts long-time support from the 20-day moving average, and is up 10% in the last 12 months.

Options traders have been overwhelmingly bullish in the last two months. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 1.93 stands higher than 94% of readings from the last 12 months. This means long calls have been getting picked up at a much quicker-than-usual pace.

Options look like a solid route, per SEDG's Schaeffer's Volatility Scorecard (SVS) of 85 out of 100, which indicates the stock has exceeded option traders' volatility expectations in the past year.

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