The IRS Has $1.3 Billion in Tax Refund Money That Must Be Claimed by Monday

The IRS is looking for 1.3 million people who didn’t file a 2017 tax return and who might be owed a refund of taxes withheld or otherwise prepaid. In fact, there’s more than $1.3 billion of potential refunds waiting to be claimed. The median potential refund is estimated to be $865. Is any of that money yours?

Claim Your Refund By May 17

If you think some of that cash could be yours, you need to act fast. In cases where a federal tax return was not filed, the taxpayer generally has a three-year window of opportunity to claim a refund. That means you must file your 2017 tax return with the IRS no later than this year’s extended tax due date of May 17, 2021, to collect the money.

Missing W-2 and Other 2017 Tax Forms?

If you’re missing W-2, 1098, 1099 or 5498 forms from 2017, try getting copies from your employer, bank or other payer. If that doesn’t work, you can go online and order a free wage and income transcript from the IRS or request one by filing Form 4506-T. The transcript will show data from information returns received by the IRS. This information can be used to file your 2017 tax return.

What If You Have a Tax Debt or Didn’t File Other Returns?

The IRS could hold your 2017 refund check if you didn’t file a 2018 or 2019 return, either. In addition, the IRS may also apply your 2017 refund to any federal or state taxes you owe for other years—or to offset unpaid child support or past due federal debts, such as student loans.

Eligibility for 2017 Earned Income Tax Credit

By filing a 2017 tax return, many low- and moderate-income workers may also be eligible for the earned income tax credit for that year. The credit was worth as much as $6,318 for 2017. The credit helps individuals and families whose incomes are below certain thresholds. The thresholds for 2017 were:

  • $48,340 ($53,930 if married filing jointly) for people with three or more qualifying children;
  • $45,007 ($50,597 if married filing jointly) for people with two qualifying children;
  • $39,617 ($45,207 if married filing jointly) for people with one qualifying child; and
  • $15,010 ($20,600 if married filing jointly) for people without qualifying children.


5 Software Stocks That Analysts Love

The software industry is driving the digital transformation of our society and economy. At this point, software runs on almost every device we use. So it’s no surprise that software stocks enjoyed huge gains in 2020, as the coronavirus pandemic forced us to stay at home, accelerating the move to digital.

2021 hasn’t been as kind. The Dow Jones U.S. Software Total Stock Index is up just 3.1% year-to-date versus a 10.5% gain for the broader market, and many software stocks are in the red so far this year. However, IT spending is on the rise, giving us the perfect opportunity to scoop up shares on pullbacks.

One area where we’re particularly bullish is SaaS, or software as a service.

SaaS is a type of licensing model where users access software on a subscription basis. Unlike 15 years ago, when you bought software on discs that were downloaded to a hard drive, software is now located on external servers – think Adobe Creative Suite or Microsoft 365. This is made possible because of “the cloud,” which refers to servers on which different types of software run and that users can access via the internet.

Software hosted on the cloud not only reduces costs for customers but also provides a time-saving option for software updates. For SaaS companies, this model provides a steady stream of subscription revenue, instead of having to market to customers to upgrade their software.

But which software stocks look most attractive to investors right now? This is a still-growing industry, but it’s also a mature one where not every player is guaranteed growth, so selectivity matters. One solution is to find companies with compelling business cases and strong fundamentals alike, the latter of which we can check using the Stock News “POWR Ratings” system.

We’ve done just that, identifying a universe of top software stocks based on POWR Ratings’ fundamental checks, and focusing on those that are also well-liked by Wall Street analysts covering those firms.

Data is as of May 11. POWR Ratings work on an A-B-C-D-F system.

1 of 5

A Salesforce signA Salesforce sign
  • Market value: $196.7 billion
  • POWR Ratings overall rating: Buy
  • POWR Ratings average broker rating: 1.46 (CRM, $215.56) is the largest customer relationship management (CRM) vendor globally, with a 30% share in the sales force automation space. Around 90% of Fortune 100 companies use at least one of CRM’s software. The company is poised to continue capturing even more of this $130 billion market as CRM is a leader in all of the markets it serves. Plus, its customer retention has been improving over time.

Sign up for Kiplinger’s FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice. has directly benefited from the move to the cloud. The rapid adoption of its cloud-based offerings is driving demand for its products. The company has, over time, added more features to its offerings, such as customer service, marketing automation, e-commerce, analytics and artificial intelligence. And each of the features is tightly integrated.

In addition, CRM has emphasized expanding its margin in recent quarters. Its current gross margin is 74.4%, while its net profit margin is 19.2%.

The POWR Ratings system, which gives CRM a B grade (so, Buy), gives strong marks for growth potential. Near-term, current-quarter earnings are expected to jump 25.7% year-over-year. Sales, which popped 20% in the prior quarter, are expected to jump 21.5% in the current period. If so, that would keep up Salesforce’s longstanding top-line growth track record – sales have improved by an average of 24.6% annually over the past half-decade.

Salesforce’s balance sheet shines, too. The stock has a current ratio of 1.2, which indicates it has more than enough liquidity to handle short-term debt. A current ratio is calculated by dividing a company’s current assets ($21.9 billion) by its current liabilities ($17.7 billion). Ideally, a firm’s current assets should be higher than its current liabilities. CRM also had $12 billion in cash as of the end of January.

Thirty-one analysts have a Strong Buy or Buy rating on the stock, according to the POWR Ratings analyst feature, putting it among the most-loved software stocks on Wall Street. That bull camp includes Wolfe Research analyst Alex Zukin, who recently slapped an Outperform rating on CRM with a $270 12-month price target. You can check out Salesforce’s other grades – including Value, Momentum, Stability and Sentiment – at Stock News.

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Microsoft buildingMicrosoft building
  • Market value: $1.8 trillion
  • POWR Ratings overall rating: Buy
  • POWR Ratings average broker rating: 1.33

Microsoft (MSFT, $246.23) needs no introduction. It’s not just one of the largest software stocks on the market – it’s one of the largest technology providers in the world. The company absolutely dominates the PC software market with an 80% share in operating systems.

If you remember getting Office software even 10 years ago, it would have either come pre-installed on your computer or on a disc. While Office certainly still dominates, it’s now run on a SaaS model.

Microsoft holds as close as a monopoly as you could want on productivity software and operating systems. Its switch to subscription-based services has produced reliable income and improving margins. Its current operating margin is 40.2%, with a net profit margin of 35%.

The PC market is not the only place where the company shines, though. Azure, its cloud offering, is MSFT’s largest and fastest-growing business and a leading player in the space. Its collaborative Microsoft Teams product is also based on a subscription model.

Microsoft – also a B, or Buy, in the POWR Ratings service – has an A grade for Sentiment, which simply means that Wall Street analysts love the stock. According to the StockNews Price Target feature, thirty-one analysts have a Strong Buy or Buy rating on the stock.

Among those is Argus Research’s Joseph Bonner, who recently reiterated his Buy rating and $300 price target.

“As enterprises and, indeed, economies emerge from the COVID-19 lockdown enforced trough, Microsoft is well positioned to execute on increased enterprise IT spending to spur growth as it is one of the few companies that has a product set aimed at enterprise efficiency, cloud transformation and collaboration, with a large and loyal installed base,” Bonner says. “We should also mention Microsoft’s large cash cushion and rock-solid balance sheet as important differentiators.”

Indeed, Microsoft’s Quality grade of B indicates a strong balance sheet. In addition to improving margins, the company has a return on equity of 41.7% and a return on invested capital of 29%, which means MSFT is managed efficiently. Microsoft also had a whopping $125.4 billion in cash as of the end of March, dwarfing its long-term debt of $50 billion.

You can get a full look at Microsoft’s grades on the Stock News Price Target page.

3 of 5


Someone looks for the Adobe app on their tabletSomeone looks for the Adobe app on their tablet
  • Market value: $227.8 billion
  • POWR Ratings overall rating: Buy
  • POWR Ratings average broker rating: 1.38

Adobe (ADBE, $485.19) is another global software titan. The company generates the bulk of its revenue through licensing fees from customers. It completely dominates the content creation market. Originally known for its PDF reader and Photoshop, ADBE is now a diversified software company offering electronic document technology and graphic content authoring applications to creative professionals, developers and large enterprises.

Adobe has been enjoying increased customer engagement on its website thanks to the remote working environment. This has bolster results over the past few quarters, and it has propped up earnings estimates for the quarter ending in May. Over the past two months, analysts have raised their EPS estimates from $2.70 per share to $2.81. The increased customer engagement won’t change anytime soon as its solutions are located on the cloud.

ADBE remains the de facto standard in content creation software with its Document Cloud. In addition, as smartphone purchases continue to increase, more and more people will be using its PDF file format. ADBE has also added marketing services in its digital experience segment, which should help drive growth over the long term. Indeed, analysts are forecasting an annual earnings growth rate of 17.5% over the next five years.

The POWR Ratings service rates ADBE a B, in part because of B grade for Sentiment. Twenty-three analysts rate the company a Buy or Strong Buy, which makes for one of the most bullish camps among software stocks.

Among those optimistic pros is Stifel, which notes a new relationship with a FedEx (FDX) subsidiary.

“With COVID driving increases in e-commerce sales (Adobe highlights 42% y/y growth in U.S. online shipping) in 2020, businesses and software vendors have been forced to assess the most suitable shipping solutions and providers to ultimately get their products into customer’s hands,” Stifel says. “At (the company’s 2021 virtual summit), Adobe announced a new relationship between FedEx’s subsidiary ShopRunner and Adobe Commerce that will enable free two-day shipping, seamless checkout, returns, and customer loyalty solutions. Additionally, Adobe merchants will gain access to FedEx postpurchase logistics intelligence, which aids users in the prioritization and coordination of order fulfillment and delivery efforts.

“We believe this partnership can help Adobe keep pace with the rapid pace of change and heightened levels of customer expectations in the e-commerce market.”

Adobe also features a strong balance sheet that features $5 billion in cash versus zero short-term debt and $4.1 billion in long-term IOUs. ADBE also has a favorable current ratio of 1.3, and a fat net profit margin of 40.7%. You can get access to the rest of ADBE’s grades at Stock News.

4 of 5


Autodesk buildingAutodesk building
  • Market value: $59.9 billion
  • POWR Ratings overall rating: Buy
  • POWR Ratings average broker rating: 1.55

Autodesk (ADSK, $277.42) is an application software company serving industries in architecture, engineering and construction. Its software enables the design, modeling and rendering needs of these industries. The firm is considered the global standard for computer-aided design software. Millions rely on its software to design and model buildings, manufacture products, and animate films and video games.

Like many other software stocks, ADSK has switched to a SaaS model. This should bring on more customers who were previously using outdated versions of its software. It also should extract greater revenue per user. That’s most likely why analysts expect Autodesk to grow earnings an average of 35.6% annually over the next five years.

ADSK has primarily driven revenue through relationships with higher-education programs to expose professionals to its software. Once introduced to the software, professionals are much more likely to use it when entering the workforce, as it’s more difficult to learn new software.

ADSK is another Buy-rated play, according to POWR Ratings. And it too has a strong Sentiment grade of B thanks to the “smart crowd’s” affinity for the stock. Fifteen analysts are bullish on shares at the moment, including Credit Suisse’s Bhavin Shah, who recently assumed coverage with an Outperform rating and $340 price target – that implies 23% upside from current levels.

The Quality grade of A reflects a rock-solid balance sheet with $1.9 billion in cash versus no short-term debt and $1.6 billion of long-term debt. The situation looks even better when you consider that operating and free cash flow have both steadily improved over the past couple of years. Check out the rest of ADSK’s grades on Stock News.

5 of 5


PTC buildingPTC building
  • Market value: $15.2 billion
  • POWR Ratings overall rating: Buy
  • POWR Ratings average broker rating: 1.44

PTC (PTC, $130.16) isn’t as large or well-known as the other software stocks on this list, but it’s a potential-packed play in the space.

PTC provides software solutions and services that aid manufacturing companies in the design, operation, and management of products. Its offerings include high-end computer-assisted design software (Creo) and product lifecycle management software (Windchill), in addition to internet-of-things (IoT) and augmented reality (AR) industrial solutions.

The company is benefitting from the increased adoption of computer-based design in the automotive sector. An increase in demand for precision in design and digitalization of construction should drive demand for its Creo 3D CAD offering in the automotive, aerospace, manufacturing, and defense spaces. Plus, an increase in spending by companies on next-gen tech like IoT and AR/VR presents future growth potential for PTC.

All these factors help explain why analysts expect the company to grow earnings 29% in 2021, and at an average of 22.3% annually over the next five years. That filters down into a B rating in the POWR Ratings system.

The analysts seem to like PTC as well, given a B grade for Sentiment. Thirteen of 16 covering analysts rate the stock a Buy or Strong Buy, including Barclays, which recently upped its price target to $161 per share (24%).

Healthy financials educate a Quality grade of B. That’s based on a current ratio of 1.3, and $326 million in cash compared with no short-term debt as of the most recent reported quarter. It is worth pointing out that long-term debt is $1.5 billion, but a well-above-industry-average gross margin of 78.2% helps PTC generate plenty of free cash flow.

To access the rest of PTC’s grades, check out Stock News.


5 States With No State Sales Tax

Many people don’t factor in sales taxes when they’re looking at the tax-friendliness of different states. That’s a mistake. Forty-five states plus the District of Columbia impose a sales tax. In addition, local sales tax is collected in 38 states. The combined state and local levy can be hefty, too. In fact, in Tennessee (which took the top spot in our round-up of the 10 States With the Highest Sales Tax), the average combined state and local sales tax is 9.55%, according to the Tax Foundation. That’s a big bite out of your wallet every time you make a purchase.

On the flip side, for states that don’t impose a sales tax — Alaska, Delaware, Montana, New Hampshire and Oregon — residents are often hit hard with other taxes (like income or property taxes). Afterall, money for roads and schools has to come from somewhere. New Hampshire, for example, has some of the highest real estate taxes in the country. In Oregon, income tax rates can be as high as 9.9%, which is the fourth-highest top rate in the nation. 

The information below will help you understand more about what you will really pay to live in the five states with no sales tax. For each state, we’ve also included a link to our full guide to state taxes for middle-class families to help you put these shopping destinations in perspective.

Income tax brackets are 2020 values, unless otherwise noted. Property tax values are for 2019, the most recent data available.

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The state of Alaska.The state of Alaska.

Overall Rating for Middle-Class Families: Most tax-friendly

Sales Tax: While the Last Frontier has no state sales tax (or else it wouldn’t be on this list), localities can levy sales taxes, which can go as high as 7.5%. But, according to the Tax Foundation, the statewide average is only 1.76%. That’s the lowest combined average rate for states that impose either state or local sales taxes.

Income Tax Range: No state income tax.

Property Taxes: In Alaska, the median property tax rate is $1,182 per $100,000 of assessed home value, which is above the national average.

For details on other state taxes, see the Alaska State Tax Guide for Middle-Class Families.

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The state of Delaware.The state of Delaware.

Overall Rating for Middle-Class Families: Most tax-friendly

State Sales Tax: Delaware has no state or local sales taxes. It’s interesting to note that, in response, New Jersey halved its sales tax in Salem County, which borders Delaware.

Income Tax Range: Low: 2.2% (on taxable income from $2,001 to $5,000). High: 6.6% (on more than $60,000 of taxable income). The top rate is middle-of-the-road when compared to other states. Wilmington also imposes a city tax on wages.

Property Taxes: For Delaware homeowners, the median property tax rate is $562 per $100,000 of assessed home value — the lowest among the states featured on this list.

For details on other state taxes, see the Delaware State Tax Guide for Middle-Class Families.

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The state of Montana.The state of Montana.

Overall Rating for Middle-Class Families: Tax-friendly

State Sales Tax: No state sales tax, but some resort destinations such as Big Sky, Red Lodge and West Yellowstone have local sales taxes.

Income Tax Range: Low: 1% (on up to $3,100 of taxable income). High: 6.9% (on more than $18,700 of taxable income).

Starting in 2022, the top rate will be 6.75% on taxable income over $17,400. Then, beginning in 2024, the income tax rates and brackets will be substantially revised (there will only be two rates – 4.7% and 6.5%).

Property Taxes: For homeowners in Montana, the median property tax rate is $831 for every $100,000 of assessed home value. 

For details on other state taxes, see the Montana State Tax Guide for Middle-Class Families.

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New Hampshire

The state of New Hampshire.The state of New Hampshire.

Overall Rating for Middle-Class Families: Mixed tax picture

State Sales Tax: None.

Income Tax Range: New Hampshire doesn’t have an income tax. But there’s a 5% tax on dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers).

Property Taxes: The median property tax rate in New Hampshire is $2,050 for every $100,000 of assessed home value. 

For details on other state taxes, see the New Hampshire State Tax Guide for Middle-Class Families.

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The state of Oregon.The state of Oregon.

Overall Rating for Middle-Class Families: Not tax-friendly

State Sales Tax: None.

Income Tax Range: Low: 4.75% (on up to $7,200 of taxable income for married joint filers and up to $3,600 for single filers). High: 9.9% (on more than $250,000 of taxable income for married joint filers and more than $125,000 for single filers). Dollar figures for 2020 are not available yet, so 2019 amounts are shown.

A “kicker” tax credit may be available on tax returns for odd-numbered years. The credit is authorized if actual state revenues exceed forecasted revenues by 2% or more over the two-year budget cycle.

Property Taxes: The median property tax rate for Oregon homeowners is $903 per $100,000 of assessed home value.

For details on other state taxes, see the Oregon State Tax Guide for Middle-Class Families.


There’s Still Time to Fund Your IRA and Cut Your Taxes

As we approach the end of tax filing season, make sure you haven’t overlooked one of the best ways to cut your tax bill and secure your future — funding a traditional IRA. (There is no upfront tax break for funding a Roth IRA.)

You can make an IRA contribution for the 2020 tax year up until the tax return filing deadline, which is May 17 this year. That doesn’t leave much time, but if you have some extra income – say, from a stimulus check – go ahead and deposit it into an IRA account now before time expires. (Just make sure the IRA administrator knows it’s for the 2020 tax year.)

And what about those tax savings? Well, depending on your income, you may be able to deduct your IRA contribution on your 2020 return. To contribute to a traditional IRA, you or your spouse must have earned income from a job. But, otherwise, you may be able to deduct contributions to an IRA even if you or your spouse are covered by another retirement plan at work. Plus, starting last year, seniors age 70½ and older with earned income can contribute to a traditional IRA, too.

Here’s some more good news: The IRA deduction is an “above the line” adjustment to income, meaning you don’t have to itemize your deductions to claim it. It will reduce your adjusted gross income (AGI) dollar-for-dollar, lowering your tax bill. And your lower AGI could make you eligible for other tax breaks, which are tied to income limits.

Who Qualifies

If you’re single and don’t participate in a retirement plan at work, you can make a tax-deductible IRA contribution for 2020 of up to $6,000 ($7,000 if you’re 50 or older) regardless of your income. If you’re married and your spouse is covered by a workplace-based retirement plan but you’re not, you can deduct your full IRA contribution as long as your joint AGI doesn’t top $196,000 for 2020. You can take a partial tax deduction if your combined income is between $196,000 and $206,000.

But even if you do participate in a retirement plan at work, you can still deduct up to the maximum $6,000 IRA contribution ($7,000 if you’re 50 or older) if you’re single and your income is $65,000 or less ($104,000 if married filing jointly). And you can deduct some of your IRA contribution if you’re single and your income is between $65,000 and $75,000, or if you’re married and your income is between $104,000 and $124,000.

Spouses with little or no earned income for 2020 can also make an IRA contribution of up to $6,000 ($7,000 if 50 or older) as long as their spouse has sufficient earned income to cover both contributions. The contribution is tax-deductible as long as your household income doesn’t exceed the limits for married couples filing jointly.

Double Tax Break

Some low- and moderate-income taxpayers get an extra break for contributing to an IRA or other retirement account.

In addition to the usual IRA deduction, you may qualify for a Retirement Savers tax credit of up to $1,000 for contributions to an IRA or other retirement tax plan. (A tax credit, which reduces your tax bill dollar-for-dollar, is more valuable than a deduction, which merely reduces the amount of income that is taxed.)

The actual amount of the credit depends on your income. It ranges from 10% to 50% of the first $2,000 contributed to an IRA or other retirement account. To be eligible, your 2020 income can’t exceed $32,500 if you’re single, $48,750 if you’re the head of a household with dependents, or $65,000 if you’re married filing jointly. The lower your income, the higher the credit. But you can’t claim the Retirement Savers credit if you’re under 18, a student, or can be claimed as a dependent on someone else’s tax return.

File an Amended Return

What if you already filed your 2020 tax return? No problem – just file an amended tax return after May 17 to claim your new or increased tax breaks. You generally have three years from the date you filed your original return or two years from the date you paid any tax due to file an amended return (go with whichever date is later).

Use Form 1040-X to file an amended return. You can mail in a paper return or file electronically. We recommend e-filing your amended return, since it will be processed much faster. If you’re changing your IRA deduction, make sure you write “IRA deduction” and the amount of the increase or decrease in Part III of the form. Once you file an amended return, you can track its status online using the IRS’s “Where’s My Amended Return?” tool or by calling 866-464-2050.


5 Pick-and-Shovel Solar Stocks for the Green Energy Gold Rush

The solar energy boom is the modern equivalent of the California Gold Rush of 1848.  

Data from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association notes that it took 40 years to reach 1 million solar installations in the U.S., but just three more years to hit 2 million installations. And the forecast for 2021 alone is 3 million installations.  

Green energy exchange-traded funds (ETFs) are on the rise as earnings improve and investors pile into solar stocks. This is evidenced in the bellwether Invesco Solar ETF (TAN), which has more than doubled over the past year, though lately, it has cooled off.  

With climate change firmly atop the Biden administration’s agenda, the set up for solar stocks looks good. 

And like the supply companies that profited during the gold rush selling picks and shovels to eager prospectors, solar energy offers a similar “pick and shovel” opportunity. Companies that make components, batteries, the materials to produce panels or the software to manage them are riding the coattails of the inexorable march away from fossil fuels and toward solar power. 

Here are five of the best solar stocks that offer a differentiated strategy for profiting from the green energy boom.   

Data is as of May 10. 

1 of 5

SolarEdge Technologies

residential solar panelsresidential solar panels
  • Market value: $11.1 billion

Israel-based SolarEdge Technologies (SEDG, $213.34) makes inverters, a key component of the microgrid that delivers solar energy to where it’s needed in homes, schools, businesses, campuses and beyond.   

Shares of SEDG have been on a tear the last two years, but have declined more recently to current levels near $210 since hitting an all-time closing high near $365 in December.  

Sentiment has likely tempered on the solar stock thanks to a modest 2% rise in 2020 revenues and a 3% drop in net income. The company’s earnings release was mum on the precise reason for this, but declines in both gross and operating margins suggests that as the market for microgrids expands, so too do costs, at least at this stage of the game.

This should be of little concern for longer-term investors looking at solar stocks. 

First, SEDG is sitting on just over $1 billion in cash and marketable securities, with just $17 million in debt due this year.  

Next, cash flow from operations for 2020 was $223 million, almost twice reported net income, and this easily covered $126 million in capital expenditures (CapEx) with a sizable cushion left over.  

Finally, about 40% of SEDG sales come from the U.S. While renewable energy policies have been wobbly, a progressive administration coupled with 37 states that have renewable energy targets offers a good set up for sales and earnings growth. 

Consensus estimates for SolarEdge Technologies’ fiscal 2021 are $3.82 per share, which, if realized, would represent a 37% jump from 2020 basic earnings per share (EPS) of $2.79 – a pretty nice bump.

2 of 5

Enphase Energy

solar power invertersolar power inverter
  • Market value: $16.0 billion

Enphase Energy (ENPH, $118.12) also manufactures inverter systems. Unlike “string converters” made by SolarEdge, which draw power wholesale from all the panels in an installation, Enphase sells microinverters, which draw energy from individual panels as needed or as conditions allow, and, as a result, can be more efficient.    

Though microinverters cost more, the market for them may grow faster because they can be more responsive to site-specific conditions. Estimated average annual global growth for microinverters through 2025 is 21% versus about 15% for string inverters, according to Research and Markets, a market research firm. 

For investors who believe in the underlying fundamentals of the solar market and who are looking to buy the dips, Enphase might be the stock for you. 

Shares of the solar stock are off from their February highs of over $200, and took another hit after Enphase’s first-quarter report. While sales grew an impressive 46% year-over-year, earnings declined and ENPH reduced its second-quarter outlook based on semiconductor shortages and supply chain interruptions.

Enphase can weather these kinds of storms for now. It’s sitting on about $1.5 billion in cash, and while long-term debt is just over $900 million, the current portion is just $84 million. Operations last year threw off about $216 million in cash, while capital expenditures were modest at about $25 million. 

3 of 5

Generac Holdings

  • Market value: $19.2 billion

Generac Holdings (GNRC, $305.21) has grown handsomely selling backup generators to consumers who have become more attuned to and proactive toward power outages. Ice storms in Texas and fires in California offer vivid reminders about the importance of backup power. 

But in 2019, Generac entered the battery storage business with a pair of acquisitions. By purchasing Pika Energy and Neurio Technology, GNRC positioned itself to develop and distribute its PWRcell and PWRview solar power products.   

Sales are small and not broken out on earnings reports, but Generac touts PWRcell as a high-growth area for the company. And what we’re seeing with PWRcell today might be the thin end of the wedge, a set up many investors like. Think Apple (AAPL), where the relatively small services division is expected to be the next big leg of growth for the company, and contributed to about 19% of total sales in its fiscal second quarter. And at (AMZN), its web services division – at about 10% of total sales – is seen as one of the linchpins of the company’s growth. 

Generac enters the solar business with two distinct advantages. First, it’s reliably growing in its core generator business, increasing sales and cash flow at an average annual rate of 10% during the last five years, according to Value Line. Notably, cash flow from operations last year was some $487 million, plenty to finance its foray into the solar business.   

Second, unlike Enphase and SolarEdge, which rely principally on third-party sellers and are relatively young companies, Generac has been doing business since 1959, has a global network of 7,000 dealers and has decades of customer data that it can ply with its solar offering. 

Shares have been highfliers, up more than 250% since April of last year.  Arguably, much of the enthusiasm is being driven by generators, but GNRC could emerge as one of the best solar stocks as its green energy business takes hold. 

4 of 5

Daqo New Energy

Raw polysiliconRaw polysilicon
  • Market value: $5.3 billion

Daqo New Energy (DQ, $72.15) is based in China and produces polysilicon, which is used to make solar panels. Right now, China is the world’s largest producer of solar panels, and as a result, Daqo is well-positioned to capitalize on the country’s leadership in this green energy space. 

Another driver for Daqo shares is that demand for polysilicon is increasing and this is boosting prices. For instance, according to Bernreuter Research, in 2021 alone, prices per kilogram for polysilicon have risen from $11 to nearly $19, growth which goes straight to Daqo’s top line. Daqo is solidly profitable, and price increases for its core product are driving increases in its gross and operating margins.    

Chinese companies have been chipping away at the hegemony of Western polysilicon producers. Daqo, which is among the top 10 polysilicon producers in the world, typifies this trend with its recently announced production expansion which will add 35,000 metric tons of capacity, an increase of some 45%. 

With solar booming, Daqo will presumably find a home for all of this new polysilicon, at what looks like increasing prices and better margins. This could make DAQO one of the best solar stocks to have on your radar.

5 of 5


green technologygreen technology

Market value: $549.6 million

Almost nothing in this world works without software, and solar power is no exception. CleanSpark (CLSK, $16.23) offers a suite of software solutions that provide end-to-end microgrid modeling, communications and energy management. 

CleanSpark is tiny, but its market cap, at about $550 million, suggests some investors think it could be mighty. CLSK is not for the faint of heart, but the fact that it’s showing some momentum above and beyond what’s been seen in the broader green energy sector is notable. In the first three months of 2021, sales were up over 120% year-over-year.  And as of mid-April, the company reported significant growth in its backlog – up 220% from mid-February.   

CleanSpark doesn’t make money yet, but analysts are forecasting it will report a profit at the end of this quarter. If it does, catching the solar stock now might be a tenable first step in building a larger position long term. Of note, the second quarter earnings estimate, now 8 cents per share , has come down from an estimated 22 cents per share earlier this year, so conviction may be on the wane. 

Also noteworthy, CleanSpark is ramping up its participation in the Bitcoin mining business. Mining revenue didn’t appear as a line item on its most recent annual report, but it did show up in CLSK’s first-quarter results. And in April of this year, the company announced a material expansion of its Bitcoin mining operations.  

Carbon-belching Bitcoin mining and renewable energy can be somewhat at odds, but CleanSpark notes that 95% of the power for its mining operations is carbon free – an important marker for ESG investors, those focused on environmental, social and corporate governance, and perhaps a source of buying or support for the solar stock going forward. 


Is an Annuity a Good Choice for You? Questions to Ask

Annuities can help you save for retirement, reduce risk, cut your taxes and guarantee a lifetime income. But they’re not right for everyone.

How can you tell if an annuity is right for you? And if one is, which kind would best meet your needs?

Deferred annuities — fixed, variable and fixed-indexed — help you save more for retirement while deferring taxes on earnings. Immediate annuities pay current income for people who need more income right away, usually retirees.

Ask yourself the following questions to decide whether an annuity is right for you:

  • Do I have enough cash reserves to meet my expected needs? Most annuities tie up your money for a number of years. They’re thus appropriate only for people who can afford to set aside some of their money.
  • Does it look like my Social Security and pension income (if any) won’t quite cover my expenses in retirement? Estimate how much income you’ll need in retirement. An annuity can fill a shortfall by paying a guaranteed lifetime income. Equally important, it can serve as longevity insurance — a hedge against the financial risk of living to a very old age.
  • Will I need supplemental income for anyone else besides myself, such as a surviving spouse should I pre-decease them? If so, then the reliable income an annuity provides could be beneficial.
  • Would I benefit from tax-advantaged savings? Most people will benefit, but if you’re in a low tax bracket, an annuity won’t be quite as compelling.

Once you decide that an annuity is right for you, these questions can help you decide which type or types will suit you best.

  • When do I expect to need the annuity’s income payments? If it’s right now or within a few months, you should be looking at an immediate annuity. If you’re saving for retirement years in the future, a deferred annuity makes sense.
  • Will I be able to withdraw money from the annuity if I should need it? An immediate annuity usually has no liquidity, because your money has been converted into an income stream. Deferred annuities usually offer unpenalized access to some of your money. Different types have different amounts of liquidity.
  • Do I want a guaranteed interest rate and guaranteed principal? If your answer is yes, then you’ll want a plain fixed annuity, which provides a set rate for a number of years, much like a certificate of deposit. This type of annuity is called a multi-year guaranteed annuity. Advantages over CDs include tax deferral and often a markedly higher rate of interest. Savers who are willing to commit their money for five years or longer as of mid-April 2021 can earn 2.90% or more, guaranteed and tax-deferred. See this summary of current annuity rates.
  • Am I willing to risk losing principal for a chance of higher earnings? If so, then consider a variable annuity, which is much like a set of mutual funds within an annuity wrapper that provides tax deferral and optional benefit guarantees.
  • Can I “have my cake and eat it too?” If that’s your goal, consider a fixed indexed annuity, which offers the potential for higher interest earnings while guaranteeing your principal. However, unlike a traditional fixed annuity, it pays a fluctuating interest rate, which can go as low as zero when the stock market declines. Also, there are caps on upside gains. Over the long term, a fixed indexed annuity stands a good chance of outperforming bonds, CDs and standard fixed annuities.
  • When do I plan on using the money that’s in the annuity? Immediate annuities begin making income payments shortly after purchase, while deferred annuities leave the funds inside your annuity to accumulate over time before converting to an income stream in the future. If you think you’ll need to use the funds before age 59½, a deferred annuity won’t be suitable because of tax penalties on early withdrawals. On the other hand, the longer you can leave your money in a deferred annuity, the more attractive it becomes, because tax deferral is powerful in the long term.
  • What’s my risk tolerance/where is my money invested now?  Your risk tolerance will depend on several different factors, such as your age, your investment time horizon, your retirement goals, and your comfort level with volatility. The good news is that annuities can offer a wide range of different options to choose from based on your specific risk tolerance, as well as the financial goals that you’re trying to accomplish.  If the bulk of your savings is in the stock market, consider a standard fixed annuity to reduce your risk profile. On the other hand, if almost all your money is in safe, no-growth holdings like bank accounts and money market funds, consider adding growth potential via a variable or fixed indexed annuity.
  • Do I understand the tax implications? Annuities have tax advantages, but withdrawals of earnings are subject to ordinary income tax. Typically, you’ll be taking income from your annuity during retirement when your tax bracket will likely be lower. If you are purchasing the annuity contract for an Individual Retirement Account (IRA) or another type of retirement program, consult with a tax professional regarding eligibility and tax consequences.

CEO / Founder, AnnuityAdvantage

Retirement-income expert Ken Nuss is the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed and immediate-income annuities. It provides a free quote comparison service. He launched the AnnuityAdvantage website in 1999 to help people looking for their best options in principal-protected annuities.


Business Spending: Going Faster Unless Chip Shortages Intervene

Capital equipment spending looks to be having a banner year. Expect 15% growth this year, compared with just 0.2% last year. New orders will rise a similar amount. Purchases of machinery are robust, as are computer sales. However, some sales of electronics, motor vehicles and machinery are being temporarily slowed by the shortage of semiconductors. Businesses are responding to rising demand by implementing expansion plans, though large firms are more enthusiastic than small firms at this time.

Likely beneficiaries of the spending binge include makers of industrial robots and 3D printers. Workers are in short supply in manufacturing. Robots can help, and they reduce the need for worries about social distancing among workers. 37% of U.S. assembly plants plan to invest in 3D printers, a record high. Interest is also high in collaborative robots, which work in close contact with humans instead of as stand-alone ‘bots. 31% of assemblers are currently using the technology or plan to within the next year, and 17% within two to three years.

A boost for purchases of oilfield equipment seems likely, now that the price of West Texas Intermediate crude oil has surpassed $60 per barrel, its highest level since the beginning of 2020. The number of active drilling rigs has been on a steady upward path since the beginning of October.