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Bet on SunPower, Not Elon Musk's Precarious SolarCity

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Elon Musk, the co-founder and chief executive of Tesla is the chairman of SolarCity, but this solar-energy systems provider is no safe haven.

In fact, SolarCity is in big trouble, with shares down more than 62% this year.

A better choice is SunPower (SPWR - Get Report) , which is down more than 40% this year but is an under-valued growth opportunity. In fact, the company delivered $100 million more in first-quarter revenue than Wall Street estimated.

Why is Musk wrong on SolarCity, and why is SunPower among a group of innovative companies that will soar this year?

For starters, SolarCity had yet another bad quarter.

Must Read: Here's How Tesla Is Building the Apple of the Future

Although first-quarter installation numbers looked good, the company missed on earnings per share, falling 25 cents short of expectations. In addition, revenue grew almost 82%, but gross margins fell to 11%.

And SolarCity issued second-quarter guidance that was well below analysts' expectations.

Furthermore, all that talk of hitting positive cash generation by the end of the year, even as SolarCity keeps spending on research and development and module manufacturing, seems...


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