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Sunnova, Sunrun Chosen as Top Picks at J.P. Morgan

Investors should 'tactically' add to their solar stock positions if second-quarter earnings cause volatility, said J.P. Morgan's Mark Strouse.
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Sunnova  (NOVA) - Get Report and Sunrun  (RUN) - Get Report shares rose Wednesday, after J.P. Morgan analyst Mark Strouse chose them as top picks for the second half of this year.

He likes the industry’ fundamentals for the medium and long term, and thinks supply constraints should lessen in the second half, Bloomberg reports.

Investors should “tactically” add to their solar stock positions if second-quarter earnings cause volatility, Strouse said.

The recent drop by Shoals Technologies  (SHLS) - Get Report makes the stock appealing, he said.

Sunnova stock traded at $36.04, up 2.9% at last check, but has slid 28% over the last six months amid concern that solar stocks were overbought.

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Sunrun stock recently traded at $53.09, up 5.1% at last check, but has dropped 36% over the past six months. Shoals recently traded at $27.28, up 6.2% at last check, but has lost 12% over the past month.

The Invesco Solar ETF TAN recently traded at $86.20, up 3.9% at last check.

TheStreet.com founder Jim Cramer recently recommended solar stocks. One was Tesla  (TSLA) - Get Report.

Its Chief Executive Elon Musk is involved in a civil action with some of Tesla’s shareholders over the bailout of SolarCity in 2016.

Another Cramer pick was First Solar  (FSLR) - Get Report, which has avoided tariffs by making its proprietary panels in the U.S.

With the company's 2021 production sold out, along with most of its 2022 production, Cramer said First Solar is a buy, even at 21 times earnings. First Solar shares bottomed when the pandemic hit in March 2020. It has been up and down since, with the stock up recently but still off its January 2021 peak.