Crocs and Sunnova Energy don't have much in common. One is a highflying footwear brand with a stellar 94 IBD Composite Rating and a $9.4 billion market capitalization. The other is a Houston-based solar company with a $722 million market capitalization and a dismal composite rating of 15.
However, these two companies had things in common in May: Both gained more than 20% and held places in the top-performing IBD industry groups for the month.
Out of the 197 industry groups tracked by IBD, the Energy-Solar industry group led the way in May, advancing 35.6% on the month. Meanwhile, the Apparel-Shoes & Related Manufacturing group came in second, with the 11 stocks collectively gaining 26.6% in May.
The IBD-tracked Telecom-Infrastructure, Retail-Consumer Electronics and Computer Software-Database groups made up the rest of the top five industry performers last month.
Telecom-Infrastructure industry stocks gained a combined 25.7% in May while the Retail-Consumer Electronics group advanced 21.8%. The Computer Software-Database industry surged 19.4%.
Through the end of May, the Energy-Solar group is up around 12% in 2024. The Apparel-Shoes industry has skyrocketed more than 47%. The next highest performer in the top five industries is Computer Software, advancing 35.5% this year.
Not Just Crocs Stock: It's Solar Stocks' Time In the Sun
Through mid-May, the IBD-tracked Energy-Solar industry group was down nearly 12% on the year after sinking 28% in 2023 as rising interest rates and international competition challenged the industry. However, the 29 stocks collectively roared back in the latter part of May.
SunPower ballooned 62%, partially riding the meme stock frenzy. Meanwhile, clean-energy stock First Solar soared more than 54% in May.
Fellow solar stock Sunrun jumped 40.5%. Nextracker gained nearly 29% while Sunnova Energy surged 24%. Enphase Energy advanced 17.6%.
However, SolarEdge Technologies fell 16.5%.
Large-scale renewable developers like NextEra Energy and AES gained 19.5% and 20.6%, respectively. Both stocks are in the IBD-tracked Utility-Electric Power industry group. The 30 stocks in that group collectively advanced nearly 9% last month.
Biden Tariffs Fuel Solar Stocks In May
The surge in solar stocks corresponded with President Joe Biden hiking tariffs on imported electric vehicles and assorted clean-energy goods from China on May 14, as the White House looked to insulate portions of the U.S. economy from preternaturally low-priced competition from China.
The new trade policy includes tariffs on Chinese EVs hiked to 100%, up from 25%. The previous 25% tariff on China-made EVs helped keep the vehicles from the U.S. market.
The Biden administration also announced tariffs on Chinese critical minerals, solar goods and batteries. Tariffs on lithium-ion EV batteries will increase to 25%, from 7.5%, in 2024 while "battery parts" will be taxed at 25% in 2024.
The White House also hiked the tariff rate on solar cells from 25% to 50% in 2024.
Biden has been looking to boost the U.S. clean-energy sector during his presidency, most notably with the Inflation Reduction Act, enacted in August 2022. The regulations include a massive slate of federal investments and incentives for renewable energy projects and electric vehicle manufacturing.
Footwear Stocks Make Gains On Earnings
Footwear stocks showed signs of strength amid strong earnings in May. Roger Federer-backed On Holding jumped 34% on the month as Deckers Outdoor surged 33.6%.
Birkenstock Holding soared more than 27%, breaking out above a buy point after reporting fiscal second-quarter earnings and revenue along with hiking its full fiscal year view at the end of the month.
Meanwhile, Crocs gained 25% and Skechers advanced 8%.
Birkenstock, the popular German sandal and shoemaker, announced on May 30 that Q2 EPS and revenue grew 41% and 23%, respectively, compared to a year earlier.
The company reported its earnings increase was primarily due to "strong consumer demand supported by new production capacity." The company also opened six new owned stores, bringing its total number of retail stores to 57 in Q2.
Meanwhile, Hoka maker Deckers led a sprint for shoe stocks after reporting a 43% earnings increase to $4.95 per share on a 21% revenue jump to $959.8 million. Analysts expected earnings to drop 14.2% while revenue growth slowed for the second quarter in a row to $888 million.
DECK stock is now nearing a profit-taking zone above a 916.65 buy point for a cup-with-handle base. Deckers is hitting record highs, surpassing its previous all-time high from late March by a wide margin.
Crocs Stock Performance
CROX stock booked consecutive weekly gains to end May, breaking above a 146.79 buy point for a cup base, according to MarketSurge charts.
The stock began building the right side of its base on May 7, gapping above its 50-day line and retaking the entry as Crocs topped Q1 estimates and gave an upbeat outlook. Shares on Monday were narrowly extended beyond a buy range ending at 154.13.
The clogs maker reported a 16% increase in adjusted earnings to $3.02 per share while revenue rose 6% to a first-quarter record $939 million. FactSet analysts expected earnings of $2.25 per share on $884.3 million in sales.
Crocs stock has a 97 Composite Rating out of a best-possible 99. CROX shares also have a 92 Relative Strength Rating and a 92 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Or A Sell?
Get Full Access To IBD Stock Lists And Ratings
Learning How To Pick Great Stocks? Read Investor's Corner
Is Rivian A Buy Right Now After It Launched Its New Product Line?
