Raymond James & Associates Analyst Pavel Molchanov says Advanced Energy Industries, Inc. (AEIS) is one of his top stock recommendations this year. He says the company announced last year that it plans to exit the solar business.
“In fact, it’s losing money in the solar business,” Molchanov says. “So when they announced last year that there would be an exit in some way from solar, the stock began to trade up, but it still hasn’t fully reflected the value of exiting the solar segment because of how much cash that segment is burning.”
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Molchanov says Advanced Energy’s exit from solar is not a comment on the solar industry in general. Rather, he says the company’s own solar business was not well-positioned.
“If it is an exit as has been the plan, then I would anticipate the Street’s earnings estimates to increase by as much as 30%, because those solar losses would no longer be hitting the income statement,” Molchanov says.
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