The best trade in red-hot solar stocks: Josh Brown – CNBC.com

The best way to play red-hot solar stocks

Josh Brown explains his move in his Playbook Playoffs portfolio, selling one ETF and trading it for a solar stock.

The best way to play red-hot solar stocks is to zero in on U.S.-based companies, said Josh Brown, author of “The Reformed Broker” blog and financial advisor at Ritholtz Wealth Management.

“New tariffs that went into effect on Chinese photovoltzic panels has made things difficult for the Chinese solar stocks,” Brown said Friday on CNBC’s “Halftime Report.”

New taxes are creating a good opportunity for their U.S. and European counterparts, he added.

The call is a change in strategy the trader who had been long Guggenheim Solar. The exchange-traded fund holds shares of both U.S. and international companies and seeks to track the performance of the MAC Global Solar Energy Index. The fund has enjoyed a nice run, up 17 percent on the year, more than double the return of the broader S&P 500.

But Brown said that now is the time to take profits, noting that the ETF has started to struggle in the last month because of its Chinese components.

Brown said that he is focusing on U.S. plays, with his top pick being Arizona-based First Solar.

“It has the biggest backlog in the industry, plays in both utility scale power projects as well as commercial and residential,” he said, adding, “General Electric owns a piece of the company, and that affiliation is helping them win huge business together.”

Brown made his moves as part of the “Halftime Report Playblook Playoffs“—a stock competition among the show’s seven regular traders. Each was given a hypothetical portfolio of $100,000 and the opportunity to make 10 trades throughout the year.

Brown is in fifth place and said that he thinks this move will add some needed beta to his portfolio.

—By CNBC’s Katie Young

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The best trade in red-hot solar stocks: Josh Brown – CNBC.com

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