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($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)
So let the sun shine in, face it with a grin.
Smilers never lose and frowners never win.
So let the sun shine in, face it with a grin
Open up your heart and let the sun shine in.
Why is the sun so awesome? You probably can’t get a tan like I can, but that’s because you’re not $$$MR. MARKET$$$. Never mind all that.
Why does investing in solar make sense for you?
Solar energy is no longer the future, it is here today. What used to be a crackpot hippie technology is now a cost effective solution for customers. As a result, installations of solar have skyrocketed. We’re not done yet. Not even close. Solar is a growing market. In 2016, ~4.08 trillion kilowatthours (kWh) of electricity were generated in power plants. U.S. large-scale solar total PV capacity was approximately 22 gigawatts (GW) at the end of 2016 and forecasts that by the end of 2018 that such capacity is projected to rise to approximately 32 GW. Worldwide, in 2016, photovoltaic capacity increased by at least 75 GW, with a 50% growth year-on-year of new installations. Cumulative installed capacity reached at least 302 GW by the end of the year, sufficient to supply 1.8 percent of the world's total electricity consumption. The prediction is $7.4 Trillion in clean energy investment by 2040 and 40% of energy from clean energy by 2030. Fossil Fuels will eventually become fossils. Parts of the world with no electricity are bypassing utility grids and instead jumping to solar generators. India and China are leading the way here.
Today I bought SolarEdge Technologies, Inc. (SEDG) at 67.85. I will sell it in 4 to 6 weeks at 78.12. Here’s why I like SEDG:
Well….one good place to start is this magnificent chart:
SEDG is up 278% in the last 12 months. That’s motoring along at like 23% per month. People are loving this stock. The fact that oil prices have doubled off of their 2016 lows means that solar energy investment makes a lot more sense than it did 2 years ago. People can’t get enough of their solar.
SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in Israel, the United States, the Netherlands, Europe, and internationally. The company's DC optimized inverter systems include power optimizers and inverters, as well as a cloud-based monitoring platform. Its products are used in a range of solar market segments, such as residential, commercial, and small utility-scale solar installations. The company sells its products directly to solar installers, as well as engineering, procurement, and construction firms; and indirectly to solar installers through distributors and electrical equipment wholesalers, as well as PV module manufacturers. SolarEdge has invented an intelligent inverter solution that has changed the way power is harvested and managed in a solar photovoltaic (PV) system. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. Since beginning commercial shipments in 2010, SolarEdge has shipped over 6.7 Gigawatt (‘‘GW’’) of its DC optimized inverter systems and its products have been installed in solar PV systems in 120 countries. SolarEdge’s mission is to become the leading provider of inverter solutions across all PV market segments and broaden the availability of clean, renewable solar energy.
There is a rising tide floating this boat. SEDG’s end markets are growing and it's gaining market share from its competitors while expanding its product line. Their system allows for maximum power generation at lower cost. SolarEdge is expected to expand its EPS figures at an annualized rate of 24% over the next three to five years. Now let me make this perfectly clear. I hate tariffs. Tariffs are stupid economic policy. But if someone is going to benefit from tariffs, it’s SEDG. Trump’s tariff will lead to greater domestic solar panel production and use and SolarEdge’s monitoring services and power optimizer businesses would benefit immensely from this.
The financial story speaks for itself:
Most solar companies are burdened with debt. SEDG doesn’t have any long term debt. SEDG has a current ratio of 3.60 which means that SEDG can more easily cover its most immediate liabilities over the next twelve months. In fact, SEDG has more cash on its balance sheet than it has current liabilities! The reason for this is that SEDG survived the initial battle royal when solar companies were killing each other and margins were thin. The debt laden companies folded and now we only have a few giants standing. There was a time when Amazon.com was losing money…can you even imagine that now?
The reason why SolarEdge doesn’t have capital problems is because they don’t manufacture the PV cells (very expensive). Instead they make the inverters, which are much cheaper. Inverters convert the energy captured by solar panels into electricity that can be fed to the wiring to power your house or office. So SEDG just plays the middle, taking its vig without having to deploy enormous capital. Solaredge is now partnered with Tesla to provide inverters that supplemented Tesla’s Powerwall. I don’t think Tesla picks these partners Ha Ho. Using SolarEdge’s Direct current (DC) optimized inverter and Tesla's automotive-grade battery technology, the solution requires only a single SolarEdge inverter to manage both PV and storage functions. The system is designed for efficient, outdoor installation and includes remote monitoring and troubleshooting to keep operations and maintenance costs low.
You want to see management performance? SEDG Return on Assets is 12.6%. It’s Return on Equity is an incredible 28.3%. That’s a real bang for your buck. SEDG is no garage shop. They have over 1000 employees and a market cap over $2 billion. SEDG’s annual earnings growth rate has been positive over the last five years. Compared to the other solar companies, SEDG has better gross margins, cash flow and, of course, its balance sheet.
So how does all of this add up to earnings today?
First Quarter 2018 Highlights
The Company reported record revenues of $209.9 million, up 11% from $189.3 million in the prior quarter and up 82% from $115.1 million year over year. GAAP net income was $35.7 million, up 83% from $19.5 million in the prior quarter and up 152% from $14.2 million year over year. GAAP net diluted earnings per share (“EPS”) was $0.75, up from $0.42 in the prior quarter and up from $0.32 year over year.
It’s a solar powered rocket ride for sure. ANAL-ysts predict 2018 earnings of $3.12 per share on revenues of $847 million. $$$MR. MARKET$$$ knows that this stock will have revenues of $940 million which will translate to earnings of $3.95 per share. If you take the existing forward PE of 20.1 and multiply it by my projected earnings of $3.95 per share, you get a stock price of:
20.1 x $3.95 = $79.40 per share, which exceeds my selling price target.
Here’s what the boss had to say about his company:
“We are pleased to announce strong first quarter results with record revenues and record profitability, despite the traditional seasonal slowdown and continued industry wide components shortages,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “Our continued technological innovation and operational excellence, coupled with our introduction of new products and financial strength positions us for further growth and industry leadership.”
Let the sun shine in….I am going to go out and get myself a new lounge chair with the quatloos I earn on this SEDG investment, then I’ll take a month off from work and get a wicked tan!
I am HUGE!
$$$MR. MARKET$$$
So let the sun shine in, face it with a grin.
Smilers never lose and frowners never win.
So let the sun shine in, face it with a grin
Open up your heart and let the sun shine in.
Why is the sun so awesome? You probably can’t get a tan like I can, but that’s because you’re not $$$MR. MARKET$$$. Never mind all that.
Why does investing in solar make sense for you?
Solar energy is no longer the future, it is here today. What used to be a crackpot hippie technology is now a cost effective solution for customers. As a result, installations of solar have skyrocketed. We’re not done yet. Not even close. Solar is a growing market. In 2016, ~4.08 trillion kilowatthours (kWh) of electricity were generated in power plants. U.S. large-scale solar total PV capacity was approximately 22 gigawatts (GW) at the end of 2016 and forecasts that by the end of 2018 that such capacity is projected to rise to approximately 32 GW. Worldwide, in 2016, photovoltaic capacity increased by at least 75 GW, with a 50% growth year-on-year of new installations. Cumulative installed capacity reached at least 302 GW by the end of the year, sufficient to supply 1.8 percent of the world's total electricity consumption. The prediction is $7.4 Trillion in clean energy investment by 2040 and 40% of energy from clean energy by 2030. Fossil Fuels will eventually become fossils. Parts of the world with no electricity are bypassing utility grids and instead jumping to solar generators. India and China are leading the way here.
Today I bought SolarEdge Technologies, Inc. (SEDG) at 67.85. I will sell it in 4 to 6 weeks at 78.12. Here’s why I like SEDG:
Well….one good place to start is this magnificent chart:
SEDG is up 278% in the last 12 months. That’s motoring along at like 23% per month. People are loving this stock. The fact that oil prices have doubled off of their 2016 lows means that solar energy investment makes a lot more sense than it did 2 years ago. People can’t get enough of their solar.
SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in Israel, the United States, the Netherlands, Europe, and internationally. The company's DC optimized inverter systems include power optimizers and inverters, as well as a cloud-based monitoring platform. Its products are used in a range of solar market segments, such as residential, commercial, and small utility-scale solar installations. The company sells its products directly to solar installers, as well as engineering, procurement, and construction firms; and indirectly to solar installers through distributors and electrical equipment wholesalers, as well as PV module manufacturers. SolarEdge has invented an intelligent inverter solution that has changed the way power is harvested and managed in a solar photovoltaic (PV) system. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. Since beginning commercial shipments in 2010, SolarEdge has shipped over 6.7 Gigawatt (‘‘GW’’) of its DC optimized inverter systems and its products have been installed in solar PV systems in 120 countries. SolarEdge’s mission is to become the leading provider of inverter solutions across all PV market segments and broaden the availability of clean, renewable solar energy.
There is a rising tide floating this boat. SEDG’s end markets are growing and it's gaining market share from its competitors while expanding its product line. Their system allows for maximum power generation at lower cost. SolarEdge is expected to expand its EPS figures at an annualized rate of 24% over the next three to five years. Now let me make this perfectly clear. I hate tariffs. Tariffs are stupid economic policy. But if someone is going to benefit from tariffs, it’s SEDG. Trump’s tariff will lead to greater domestic solar panel production and use and SolarEdge’s monitoring services and power optimizer businesses would benefit immensely from this.
The financial story speaks for itself:
| 2015 | 2016 | 2017 | TTM | |
| Revenue | 325.08 | 489.84 | 607.05 | 701.86 |
| Net Income | 21.12 | 76.61 | 84.17 | 105.68 |
| EPS | 0.27 | 1.73 | 1.85 | 2.28 |
The reason why SolarEdge doesn’t have capital problems is because they don’t manufacture the PV cells (very expensive). Instead they make the inverters, which are much cheaper. Inverters convert the energy captured by solar panels into electricity that can be fed to the wiring to power your house or office. So SEDG just plays the middle, taking its vig without having to deploy enormous capital. Solaredge is now partnered with Tesla to provide inverters that supplemented Tesla’s Powerwall. I don’t think Tesla picks these partners Ha Ho. Using SolarEdge’s Direct current (DC) optimized inverter and Tesla's automotive-grade battery technology, the solution requires only a single SolarEdge inverter to manage both PV and storage functions. The system is designed for efficient, outdoor installation and includes remote monitoring and troubleshooting to keep operations and maintenance costs low.
You want to see management performance? SEDG Return on Assets is 12.6%. It’s Return on Equity is an incredible 28.3%. That’s a real bang for your buck. SEDG is no garage shop. They have over 1000 employees and a market cap over $2 billion. SEDG’s annual earnings growth rate has been positive over the last five years. Compared to the other solar companies, SEDG has better gross margins, cash flow and, of course, its balance sheet.
So how does all of this add up to earnings today?
First Quarter 2018 Highlights
- Total revenues of $209.9 million
- GAAP gross margin of 37.9%
- GAAP net diluted EPS of $0.75
The Company reported record revenues of $209.9 million, up 11% from $189.3 million in the prior quarter and up 82% from $115.1 million year over year. GAAP net income was $35.7 million, up 83% from $19.5 million in the prior quarter and up 152% from $14.2 million year over year. GAAP net diluted earnings per share (“EPS”) was $0.75, up from $0.42 in the prior quarter and up from $0.32 year over year.
It’s a solar powered rocket ride for sure. ANAL-ysts predict 2018 earnings of $3.12 per share on revenues of $847 million. $$$MR. MARKET$$$ knows that this stock will have revenues of $940 million which will translate to earnings of $3.95 per share. If you take the existing forward PE of 20.1 and multiply it by my projected earnings of $3.95 per share, you get a stock price of:
20.1 x $3.95 = $79.40 per share, which exceeds my selling price target.
Here’s what the boss had to say about his company:
“We are pleased to announce strong first quarter results with record revenues and record profitability, despite the traditional seasonal slowdown and continued industry wide components shortages,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “Our continued technological innovation and operational excellence, coupled with our introduction of new products and financial strength positions us for further growth and industry leadership.”
Let the sun shine in….I am going to go out and get myself a new lounge chair with the quatloos I earn on this SEDG investment, then I’ll take a month off from work and get a wicked tan!
I am HUGE!
$$$MR. MARKET$$$
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