Why SunPower Shares Lit Up Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of SunPower  jumped as much as 10% in Wednesday's early trading, then settled to close up around 7% after the U.S. Department of Commerce announced that it will impose new tariffs on competing Chinese solar products.

So what: The new tariffs range from 18.56% to 35.21% and arrived roughly two weeks after several Chinese solar companies were reportedly seeking talks to resolve an American anti-dumping investigation. That investigation revolved around whether the Chinese manufacturers were exploiting loopholes to avoid anti-dumping duties imposed by the U.S. in 2012.

As a result, U.S.-based SunPower -- which manufactures products in Malaysia -- should enjoy an edge over its Chinese competitors.

Now what: Still, SunPower doesn't look quite as cheap, trading around 21 times next year's expected earnings. But it's safe to say those estimates will probably rise as analysts have time to fully digest today's new developments. For patient, long-term investors, I think SunPower stock is worth a look.

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The article Why SunPower Shares Lit Up Today originally appeared on Fool.com.

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