- CNBC's Jim Cramer on Friday told investors they should look into buying stock of Enphase, which soared this week despite reporting a poor quarter.
- Cramer was encouraged by management's outlook, which suggested the company had hit a bottom and would rebound this year.
CNBC's Jim Cramer on Friday said investors should look into buying stock of Enphase, which soared this week even after reporting a poor fourth quarter that missed Wall Street's expectations.
Despite the bump this week, by Friday's close shares of the company were down 40% from the 52-week high of $231.42 in April 2023.
Cramer said he was encouraged by Enphase's outlook, as management predicted a bottom followed by a rebound for the solar industry, which has suffered in a high interest rate environment.
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"Enphase could rally like crazy after a horrific quarter because we're finally seeing the signs of an impending bottom that you and I have been waiting for, and because the solar stocks are much more attractive as we head into a lower interest rate world.," he said. "So you do have my blessing to put on a small position here and then try to snap up some more next time we get a market-wide sell-off."
Enphase is emblematic of the solar industry as a whole, Cramer said, adding that the Fed's relentless rate hikes slowed sales, leading to an inventory glut. But the Fed indicated that it plans to cut rates later this year — although not in the spring as many on Wall Street hoped.
To Cramer, Enphase looks like a "destocking" story, meaning the company has had to burn through excess inventory. If investors want to buy shares at the bottom, they need to get in before the company finishes "destocking" and returns to growth mode, he said.
Money Report
"With Enphase, the stock already caught fire this week, but we're three to six months out from the moments where the numbers start genuinely improving, which means it's not too late to buy Enphase," he said. "One caveat here, which is that Enphase is only worth owning if you believe interest rates will fall over the course of the year — I think that's a safe bet, but it's a bet."
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