Solar energy stocks are on a roll today with the Guggenheim Solar ETF inching up by over 1% today and four stocks, namely Canadian Solar Inc. (NASDAQ:CSIQ), Sunedison Inc (NYSE:SUNE), First Solar, Inc. (NASDAQ:FSLR), and SolarCity Corp (NASDAQ:SCTY) also registering small gains on large trading volumes, with Canadian Solar leading the trend with an appreciation of over 2% so far today. Analysts have recently reaffirmed their bullish ratings on all three stocks, but smart money have been betting on them for a while. Taking into account that all three stocks are still deeply undervalued for a bunch of reasons, here’s why you might consider taking long positions in them until they set on a rebound path. solar stocks The main metric that we use in identifying stocks that go as part of our small-cap strategy is the hedge fund sentiment. Through extensive research, we have determined that one can actually benefit simply by following the hedge fund industry into its most popular ideas. Our backtests that covered the period between 1999 and 2012, determined that hedge funds’ top long picks have slightly underperformed the market, by 7 basis points per month, mainly because these companies are less risky and more price efficient. However, the expertise of hedge funds’ is best put to use to identify small-cap stocks that are poised to explode, with the backtests showing that 15 most popular small-cap ideas among hedge funds beat the market by around 95 basis points per... More