What Trillions in Green Infrastructure Spending Means for Solar Stocks (GSFI, ARRY, FSLR, SEDG)

Solar Stocks

The “good news” for solar investors looking to put cash to work is that solar stocks have underperformed the major averages so far this year. That’s good news because the fundamental picture for the group may be better than ever after profit-taking activity and supply chain obstacles have keep multiples contained right into the teeth of the biggest infrastructure spending spree in history.

The United States Senate just voted by a significant margin to push the $1 trillion-plus infrastructure bill forward, which may have major positive implications for sustainable energy stocks, especially given the multi-trillion-dollar reconciliation process that will likely accompany it. In addition, the federal government also seems like it is pointing toward enabling local officials to streamline the permit process for rooftop solar installations.

That red-tape rollback is a big deal. And the trillions in spending is an even bigger one. They both stand to breathe life back into the solar space after an 8-month consolidation that follows a 200% run higher in the TAN etf from March to December 2020. 

This could be a very strong case for interest in stocks like Solaredge Technologies Inc (NASDAQ:SEDG), JinkoSolar Holding Co., Ltd (NYSE:JKS), Green Stream Holdings Inc (OTC US:GSFI), Array Technologies Inc (NASDAQ:ARRY), First Solar, Inc. (NASDAQ:FSLR), Sunrun Inc (NASDAQ:RUN), SunPower Corporation (NASDAQ:SPWR), Canadian Solar Inc. (NASDAQ:CSIQ), and Sunworks Inc (NASDAQ:SUNW). We take a closer look at a few of the more interesting stories in the space below.

Solaredge Technologies Inc (NASDAQ:SEDG) operates as a core solar play, with its primary Solar segment engaging in the design, development, manufacturing, and sales of an inverter solution designed to maximize power generation. 

Its “All Other” segment includes the design, development, manufacturing and sales of UPS products, energy storage products, e-Mobility products, and automated machines. Its products and services include photovoltaic inverters, power optimizers, photovoltaic monitoring, software tools, and electric vehicle chargers. 

Solaredge Technologies Inc (NASDAQ:SEDG) recently announced its financial results for the second quarter ended June 30, 2021, including Revenues of $480.1 million, Revenues from solar segment of $431.5 million, GAAP gross margin of 32.5%, and Gross margin from solar segment of 37.4%.

“We are happy to finish the second quarter of 2021 with record revenues in both our solar and non-solar businesses and with continued strong demand for our products in the various geographies and across the different segments,” said Zvi Lando, Chief Executive Officer of SolarEdge. “We are successfully navigating through the challenging supply chain environment while continuing to support our customers’ growth and expansion with new and existing products.”

It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. 

Solaredge Technologies Inc (NASDAQ:SEDG) managed to rope in revenues totaling $480.1M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 44.7%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($685.9M against $399.6M).

 

Green Stream Holdings Inc (OTC US:GSFI) is a relatively unsung speculative name in the space that has been flying under the radar despite an increasingly interesting story and a lot of momentum on core catalysts.

GSFI recently announced projects in the rapidly growing urban gardening sector with solar greenhouses dedicated primarily to rooftop farming. The company has also started to ramp up a project to convert old shipping/cargo containers into inexpensive greenhouses for urban and inner city neighborhoods and Host Sites for Its Community Solar Program, and recently announced that it had hired Ramsay Land Surveying, PC to conduct Topographical Surveys and/or Elevation Certificates for five sites in New York, two of which has already been completed (607 Station Road, Bellport & 11 Station Road, Bellport),

Green Stream Holdings Inc (OTC US:GSFI), continuing to build on that momentum, just announced this week that the topographical survey has been completed for its project at 4290 Austin Blvd, Island Park, NY. 

According to its release, the Company had previously contracted with a land surveyor, Ramsay Land Surveying, PC to conduct Topographical Surveys and/or Elevation Certificates for five sites in New York. Ramsay Land Surveying, PC is close to completing the other two surveys which will allow the Company to take the final steps to getting the required permits to begin operations.

CEO James DiPrima said: “Now that the Station Road site survey is completed will allow us to meet the requirements to obtain the permits which will allow us to begin working on these site… with more to follow. It’s an exciting time for the Company and we are looking forward to take the next steps with these properties and others to follow.”

Green Stream Holdings Inc (OTC US:GSFI) shares have been testing key support in the $0.04 area, where we are seeing signs of potentially significant accumulation in recent weeks. Given the potential for trillions of dollars to pour into green infrastructure projects in coming legislation, GSFI shares could be poised as a ripe opportunity for solar stock investors with an appetite for speculative positions.

 

Array Technologies Inc (NASDAQ:ARRY) bills itself as a company that manufactures ground-mounting systems used in solar energy projects. 

The company sells its products to engineering, procurement and construction firms that build solar energy projects and to large solar developers, independent power producers and utilities, master supply agreements or multi-year procurement contracts. It has offices in Europe, Central America, and Australia. The company’s products include DuraTrack and SmarTrack. 

Array Technologies Inc (NASDAQ:ARRY) recently announced financial results for its second quarter ended June 30, 2021 and full year 2021 guidance, with highlights including Revenue of $202.8 million, a Net loss of $17.0 thousand, and Adjusted EBITDA of $16.2 million.

“We delivered strong financial results in the second quarter, despite a challenging supply chain environment. Revenues grew 76% year-over-year to $202.8 million reflecting continued strong demand for our products. Adjusted EBITDA grew 23% to $16.2 million compared to the same period last year. Our lower margins this quarter relative to last year reflect the higher input and logistics costs that continue to be a headwind for our industry” said Jim Fusaro, Chief Executive Officer of Array Technologies.

And the stock has been acting well over recent days, up something like 26% in that time. 

Array Technologies Inc (NASDAQ:ARRY) managed to rope in revenues totaling $245.9M in overall sales during the company’s prior reported quarterly financial data — a figure that represented a rate of top line growth of 9.4%, as compared to year-ago data in comparable terms.

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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