One of the tried-and-true plays in a bull market is to find momentum leaders being driven by a thematic narrative landscape with long-term implications but that have suffered a recent pullback after “valuation concerns” start to weigh on the group in the financial media or on the Street.
One such group that fits this basic storyline to a “T” right now is the solar stocks. They were blazing red hot during the fall and into the election, for obvious reasons. And now that the new regime is in place in the US and the obvious and expected steps are starting to happen, we have seen some sell-the-news action defining the tape over the past 60 days.
However – and this is the important part – the narrative remains intact: the Biden administration is going to pile billions into renewable energy. In fact, we are already starting to see hints about the big infrastructure bill set to be pushed through next year as a budget reconciliation act. The talk is now somewhere in the neighborhood of $3 trillion in total size. And we already know what the big focus will be: green energy.
That’s what the solar sector is trading into right now. And we are in a pullback in the context of a long-term upward trend.
With that in mind, let’s take a look at some of the most interesting names in the space, including: Canadian Solar Inc (NASDAQ:CSIQ), Green Stream Holdings Inc (OTCMKTS:GSFI), and Enphase Energy Inc (NASDAQ:ENPH).
Canadian Solar Inc (NASDAQ:CSIQ) is a leading manufacturer of solar photovoltaic modules, provider of solar energy and battery storage solutions, and developer of utility-scale solar power and battery storage projects with a geographically diversified pipeline in various stages of development.
Over the past 19 years, Canadian Solar has successfully delivered over 49 GW of premium-quality, solar photovoltaic modules to customers in over 150 countries. Likewise, since entering the project development business in 2010, Canadian Solar has developed, built and connected over 5.6 GWp in over 20 countries across the world.
Canadian Solar Inc (NASDAQ:CSIQ) most recently announced today the successful close of the Japan Green Infrastructure Fund. Canadian Solar will partner with Macquarie Advisory & Capital Solutions, the advisory and capital markets arm of the Macquarie Group (ASX:MQG). Macquarie is both the financial advisor and a minority investor in the Fund.
Dr. Shawn Qu, Chairman and CEO of Canadian Solar, commented, “We are pleased to partner with Macquarie and other long-term investors to launch this new development fund. JGIF’s more dedicated capital pool will further boost our competitiveness in developing clean, sustainable and high-quality solar energy projects in Japan, leveraging our strong track record both as one of the largest solar developers in the country and as the sponsor of the Canadian Solar Infrastructure Fund. Meanwhile, we expect to deliver attractive and stable returns to our long-term capital partners, including insurance companies and asset managers, who are searching for yield and looking to deploy capital to advance the clean energy transition.”
Even in light of this news, CSIQ has had a rough past week of trading action, with shares sinking something like -8% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way.
Canadian Solar Inc (NASDAQ:CSIQ) pulled in sales of $1B in its last reported quarterly financials, representing top line growth of 13.2%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.6B against $3.6B, respectively).
Green Stream Holdings Inc (OTCMKTS:GSFI) has engineered a unique model that could shake up the solar marketplace. The Company targets commercial property owners with a surplus of rooftop or sky-facing square footage space for installation of photovoltaic systems to harness energy access at prices outcompeting local utility pricing.
GSFI uses solar power purchase agreements (PPAs) or equipment leasing arrangements with the property owners, and benefits from marginal efficiencies as well as various federal or state tax credits, regulatory agency rebates, and long-term revenue streams generated from the sale of the harnessed electricity.
Green Stream Holdings Inc (OTCMKTS:GSFI) recently announced the prepayment of a Convertible Promissory Note in favor of EMA Financial, LLC dated September 22, 2020, in the amount of $147K.
According to the release, on February 24, 2021, the Company made the payment of $147,000 as full and final payment of the Promissory Note which included all principal, interest and any prepayment fees associated with this Promissory Note; Accordingly, the parties have no further rights or obligations as to each other and the Registrant will have no obligations to issue securities to Quick Capital, LLC under this Promissory Note.
The stock has suffered a bit of late, with shares of GSFI taking a hit in recent action, down about -19% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -25%. However, this comes following a rally of as much as 900% since the holidays, so it may represent a welcome pullback for interested investors.
Green Stream Holdings Inc (OTCMKTS:GSFI) has yet to begin booking revenues, but the company has put in place a fertile pathway to potential strong results in the future given its positioning and range of projects in one of the most promising market spaces for investors over coming years.
Enphase Energy Inc (NASDAQ:ENPH) bills itself as a global energy technology company, delivers smart, easy-to-use solutions that connect solar generation, storage and management on one intelligent platform.
The Company revolutionized solar with its microinverter technology and produces the world’s only truly integrated solar plus storage solution. Enphase has shipped over 17 million microinverters, and more than 790,000 Enphase systems have been deployed in over 120 countries.
Enphase Energy Inc (NASDAQ:ENPH) and the world’s leading supplier of microinverter-based solar-plus-storage systems, officially launched Enphase Solar and Storage products on the Powur platform at the Powur 2021 Scale Up National Virtual Convention held on Feb. 20, 2021. Powur, a public benefit corporation and certified B-Corp, is ranked No. 938 on the 2020 Inc. 5000 list of Fastest-Growing Companies.
“At Powur, we have a laser-like focus on delivering home energy solutions that can save homeowners money and lower their carbon footprint, and we are proud to add energy resilience with Enphase Storage,” said Jonathan Budd, CEO at Powur. “We have been impressed by the quality and performance of Enphase Solar products and adding Enphase Storage for a full plug-and-play solar-plus-storage solution makes perfect sense. There’s also no real comparison to the quality of the technical training delivered through Enphase University, which further reinforces how pro-installer Enphase is.”
Even in light of this news, ENPH has had a rough past week of trading action, with shares sinking something like -12% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way.
Enphase Energy Inc (NASDAQ:ENPH) managed to rope in revenues totaling $264.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 26.1%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($679.4M against $534M).