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Famed investor Jim Cramer is tapping on an over 20% hit to Nextracker Inc (NASDAQ: NXT) in recent weeks to build a position. 

Shares of the solar energy solutions company are roughly flat for the year. 

Jim Cramer pulled out of Foot Locker and used the proceeds to load up on 350 shares of Nextracker on Thursday. 

The Mad Money host also told members of his investment club today that he may choose to expand his stake in NXT over time. 

Cramer dubbed the Nasdaq-listed firm a leader in a rapidly growing market. He’s bullish on Nextracker also because its management sees opportunities to further improve its market share not just in the United States but internationally as well. 

NXT does not, however, pay a dividend at writing. 

Nextracker has introduced the solar industry to “hail stow” technology that helps prevent weather-related damage to the solar panels. 

Jim Cramer recommends owning shares of the $4.5 billion company based out of Fremont, California for its premium quality products that offer lowest install cost as well. 

Valuation is another reason he cited for his positive view on Nextracker stock. It’s currently trading at 16 times the midpoint of its outlook for adjusted per-share earnings. If NXT shifts up to 18 times the upper end of its earnings guidance for the full year, it will hit $55 or about 12% up from here. 

Wall Street also shares his optimism on Nextracker shares that it rates at “overweight” at writing. 

The Mad Money host is constructive on the renewable energy company as it’s a fortress in terms of liquidity stature. Nextracker ended its most recent quarter with $470 million in cash and $150 million in debt. 

More importantly, NXT is using capital to make smart acquisitions. Last week, it spent $119 million to take over Ojjo to expand its footprint in solar foundation solutions. 

Lastly, Jim Cramer is convinced that now is a suitable time to invest in Nextracker stock because energy demand is expected to increase sharply in the coming years on the back of artificial intelligence and electrification (be it of vehicles or appliances at large). 

In May, Nextracker reported its financial results for the fourth quarter that handily topped Street estimates. Dan Shugar – chief executive of the solar energy technology company said at at the time:

We reached a record backlog of over $4.0 billion that more than tripled in 2 years. We’ve accelerated our pace of product innovation.

Two other stocks that Cramer recommends owning are Okta Inc and Costco.

The post Jim Cramer just loaded up on Nextracker stock: should you too? appeared first on Invezz

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