When CVRR tanked it was becasue of a fire and the distribution dropped to around 30 cents for the quarter.
As usual, the markets were only concerned about the here and now and crushed the share price...for some strange reason thinking that was the new norm instead of a one time event.
Sometimes markets are REALLY stupid and it gives astute investors a freebe. The more you snoop around the markets the more you find opportunities like this.
As for trading CVRR, I just have a hard time trading in and out of it as long as they are going to be paying me around 15% a year...and at this price they will (on pace for 3.40 this year). The other issue is there is no way the markets will keep CVRR in the 20 dollar range if that is the case. As some point they'll decide it cheap and you'll see the share price jump up 40% within a couple weeks before leveling off. At that point you'd still be getting paid in the 8-10% range...which is still pretty solid in my book.
If you want to compare TSLA's storage system to ENPH's start with battery itself.
TSLA is 92% efficient and will last around 5000 cycles.
ENPH is 96% efficient and will last over 11,000.
As for cost....I have no clue but I do know employees cost money.
Tesla is building a massive battery plant called the Gigafactory in the desert east of Reno, and is planning to hire 6,500 workers over the next eight years.
"At Kawasaki Plant 2, completed in June 2012, the manufacturing process is operated in a fully automated manner, from blending of cathode and anode materials to inspection of completed battery cells and wrapping of external film. The entire process is centrally managed and can be operated by a minimal number of workers.
Outfitted with the latest manufacturing equipment, Plant 2 ensures a production capacity of 1 million battery cells per year, which, combined with Plant 1, enables us to produce 1.2 million battery cells per year."
6500 vs minimal?
Why the difference?
"In the past, the fact that lithium iron phosphate had a lower energy density than other cathode materials was an issue. Using a unique method that we have developed, ELIIY Power has succeeded in increasing the energy density by making a thick coating of lithium iron phosphate possible.
We have developed a unique stacking method for manufacturing equipment that folds the cathode and anode and separator together in a zigzag manner (patent applied for and open for public review).
Using this stacking method we have realized high-speed manufacturing and large-size that would be impossible with the conventional winding method."
There is also this from a few months back:
Paul Nahi, Enphase’s CEO, says that ELIIY is "extremely cost-competitive.” And Belur noted that “with all due respect”, he is very surprised by the high prices being quoted for batteries from companies like Tesla or SolarCity."
Bottom line: ENPH will be the price leader and superior product from day 1
ENPH's growth has never been in a straight line....from 2012 to 2013 it grew at only 10%, then accelerated again to the 50% range.
When asked about SEDG on both a C.C. and event presentation the answer is always, "not a lot has changed competition wise since 2014."
Clearly the market thinks different.
But SEDG's growth is slower this coming quarter than ENPH, why would that change going forward? Both companies have been around for at least 7 years.
As for future growth, you need to dig a little deeper.
ENPH just started shipping commercial micro inverters (C250) whereas before they really only had residential products to compete in the commercial space. As a result, ENPH's percentage of residential/commercial is 85/15. Look for that 15% number to jump up to 20% by year's end and then increase from there.
The battery/storage market is also going to be huge driver of earnings going forward. If it wasn't you would not be hearing Musk's name associated with it and estimates for the total storage market going far into the Billions.
As for SEDG, they still have a bowling ball around their neck in that they use a central inverter and all the drawbacks that go with it. Sure, the Optimizers remove the shading issues (at a cost) but the albatross is still there. While the market sees them as a serious competitor, it sure hasn't slowed down ENPH's growth yet....and when further costs reductions hit for micros how will that effect the market.
IMO central inverters won't even exist in the solar market place in 5 years. As micros go lower in cost and time shows them to be more reliable than central inverters why would anyone buy one? They heat up like a fireplace, take up space in the garage, create a fire hazard running from the roof to the garage, aren't as efficient, need to be replaced every decade or so and are complicated as heck to wire originally and rewire if you want to add or remove panels later.
I like this guy...he thinks big and has a real plan to get there. Those that didn't think he "gets it" needs to listen closely to this C.C., and in particular his response to the analysts that questioned the viability of the AC battery in what is rapidly becoming a crowded market. Quite a sales pitch he gave. Heck, I wanted to buy one when he was done and I have net metering.
As for the over all market...he's on the same page I'm on. Costs of micros are the only thing that is keeping all other competing products from vanishing. Right now ENPH micros account for only 2% of the total world solar installs and Nahi clearly has a goal of making a major dent in that number...and understands the only thing holding them back is cost.
In the next few weeks the CFO is going to be out in the investment world giving presentations. My guess it is there where they will begin to announce their plans to lowering cost on a significant basis. At that point the conversation will focus around the disruption point of the markets....just how low do they have to go before becoming a disruptive force in the market.
To that end, the day SCTY announces they will be installing ENPH's micros on the back of their panel is the beginning of the end for all competing techs.
My take is the dividend will be closer to 2 dollars over the next four quarters. The game changed when they bought HLSS. Those numbers are already flowing to the bottom line and they will only increase (management is thinking in the 25% growth range for dividends next year).
I thought the markets had a figured out when the share price was moving rapidly towards 20...but I guess it got scared when they did the secondary at 16 to pay for most of the purchase (better then debt IMO).
It may take a few more quarters for the markets to figure out NRZ of today is not same as the one pre HLSS purchase....but that's what makes a market.
I don't agree at all. The 2.3 to 1 ratio is being applied to GAAP earnings and not EBITDA...where the real cash flow is. You also can't take just one weak quarter and run it out from there. They've stated all along the earnings this year will be back end loaded. The insider buying recently was the same guy selling at 65, maybe he knows a little more than we do.
"First-quarter 2015 adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) was $324.3 million, compared with $393.7 million in the first quarter 2014."
"First-quarter 2015 distributable cash flow (DCF) was $217.2 million, providing 0.60 times coverage of the cash distributions that will be paid, compared with first-quarter 2014 DCF of $298.2 million that provided 1.28 times coverage."
"The partnership is reaffirming its 2015 adjusted EBITDA guidance range of $1.51 billion to $1.73 billion; its DCF guidance range of $1.08 billion to $1.26 billion; and its net income guidance range of $845 million to $1.01 billion, provided on Feb. 23, 2015."
Remember, distributions are around 1B....which is why they've been discussing raising distributions instead of cutting.
It only gets better next quarter as the crack spread is greater....but then it doesn't stop there.
New projects coming on line by Q2 next year will raise EBITDA by over 30M....around 30%. That money will
flow into distributions.
And....there is no schedule maintenance until 2018 (they'll be bought out long before then anyway.....which will extremely disappoint me since NTI will pay around 15% this year and around that going forward).
The problem is the share count is exploding rapidly due to the death spiral financing.
When UNXL took the money the share price was around 6 bucks...so they were thinking it was going to cost them maybe 2M shares....expensive, but no bid deal.
Problem is management clearly has no clue what they were getting into....obviously no DD on convertible financing.
So now that deal looks to cost them closer to 10M shares than two...and that number will only increase as they continue to short.
The bigger problem this causes is the company can't do a secondary to pay them off without just destroying the share price in one swell swoop at this point.
So...the choices are clear. Slow death (continue on track paying Hudson quarterly) or fast death (secondary to pay them off).....or actually start to make money with what they have regardless of share price and no other equity funds or loans.
The analysts are trailing indicator here, not a leading one.
They only dropped estimates after the share price got crushed.
They had no clue on the way down and they'll have no clue on the way up.
The only reasonable estimates are what the company gives one quarter out, then the analysts just
dump that number into their estimates.
Beyond that they have no clue. They didn't predict in 2013 that ENPH's growth was going to drop from 50% to 10% and they sure didn't predict it was going to jump right back to 50% the next year.
As long as margins stay in the 32% range ENPH will be just fine. What that means is they are not sacrificing margins for revenue growth.....and what that means is they are still offering a enough value in their products to command a premium price.
First off, I'm not really sure how HD-Wave tech works, but it sounds fancy so it makes for a good sound bite.
But this is coming from the company that pushed central inverters that for years has been saying they were the greatest thing ever. Now they finally state the truth.
"Inverters have not improved at the rate of computers, TVs or mobile phones over the past few years. The reason being is that inverters require a very large cooling component and have traditionally been made using heavy and costly magnetic made out of copper and other materials," said Handelsman.
"A standard inverter needs electrolyte capacitors – which are known to be a reliability issue and are also large and expensive," said Handelsman.
Large, expensive and reliability issues. Kind of exactly what I've been saying about central inverter, huh?
Ok, so they admit they've been selling hi priced junk that they knew would fail but because they priced it cheaper than the competition and no one bothered to check on their warranty issues.
So now they announce a new product...best in class (again).
Well, maybe it is. But maybe not. This little tidbit probably means there are heat issues related to the inverter and as a result the failure rate is going to be high.
Handelsman also told pv magazine that the increase in efficiency from 97.5% to 99% observed with HD-Wave technology also means that the inverter dissipates less than half the heat of a current model. "This is crucial in ridding the inverter from heavy metal parts. That being said, you still need an effective solution to dissipate the remaining heat, and we have several of those in the design phase."
Ok, so they are releasing this model knowing they are going to have heat failure issues....but they are working on the problem.
This might work out for them short term as their warranty coverage has plenty of legal loop holes in it..
Death spiral always continue to short. They have no interest in the company, they want the guaranteed return. Hudson just received 775,000 shares when the price was around 3.50. Now that it is around 1.30 they'll get close to 3M shares as their next payment.
If the share price goes up they still their profit is already locked in....as they can just pay back their short with the share they receive.
The only way you get out of this is to pay them off. But management was very naive here taking this deal. They were not in that desperate of straights that they needed to take a death spiral deal already. This is the choice of companies with zero other options....it's either take the money knowing your share price is going to get destroyed or just go under right now.
The smarter move would have been to do a secondary and taken the hit on the share price from there. Surely they could have raised 10M when their share price was near 6 bucks....for maybe around 3.
It took me a while to run through the financials to get comfortable with this company. While I was doing that the share price jumped above 15 and I thought I missed my opportunity to get in at a reasonable price.
With the over all markets in a serious correction mode NRZ finally decided to tank along with everything else...yesterday it sure looked like it was going to be the only stock on the planet that was up for part of the day.
Well, so now I"m in. If it tanks further I"m OK with that because I'm comfortable the dividend is safe and eventually feel the markets will realize NRZ of 6 months ago is not NRZ of today. It has far greater value.
And at this level it will pay you 12% to wait with the odds being that will increase greatly in the future (targeting 25% dividend increase next year).
The trend to integrate micro inverters into solar panels and reduce labor and installation costs....an ever growing portion of total price of solar...is going to happen. This was just announced today.
"Germany-headquartered SolarWorld has announced it is to develop AC modules integrated with microinverters from Enphase Energy as the two companies look to build on their strategic global partnership.
SolarWorld’s Sunmodule solar panels will be integrated with microinverters from Enphase Energy, creating an integrated AC solar module (ACM) that requires no solar inverter. The companies are convinced that this collaboration meets a growing demand in the global market for high performance AC module products.
"Past attempts at AC modules, essentially power-electronic units bolted on to modules, have not delivered the full value that such an innovation should provide," said SolarWorld VP of sales and marketing for the U.S., Ardes Johnson. "With Enphase, we are developing a highly integrated module built in automated, high-reliability factory conditions."
Johnson stressed that the benefits of such an AC module include reduced labor costs and installation times, easier logistics and streamlined O&M in the field, owing to the way the new panels are designed."
"In the future, the ACM architecture shall enable a seamless integration with Enphase’s Energy Management System," said Zschiegner. The Energy Management Sysytem from Enphase includes the company’s soon-to-be launched AC battery, which boasts load-management capabilities.
SolarWorld expects to begin shipment of the ACM in late 2016, with the company first set to roll out its new rail-free racking system and five-busbar PERC solar cells, which are currently being produced at the Hillsboro factory in Oregon.
Clearly ENPH's new S inverter...that didn't even exist a few weeks ago will be the micro embedded.
This also addresses an ever growing portion of the homeowners total solar cost...installation.
Looking at the share price the market is saying ENPH's day in the sun is over and micro inverters are about to be replaced in popularity by DC Optimizers.
By my thinking the sun hasn't even risen the first time on ENPH yet.
The integration of micro inverters has been a long time coming with two major hold ups causing the delay...for years.
The first was reliability. Solar panels are very reliable in general, but SolarWorld has always been at the top of the reliability chart.....
"Affording easy access to consumers, SolarWorld’s U.S. operations stand ready to back claims under a 25-year linear performance guarantee, now an industry standard that the company pioneered. SolarWorld’s failure rate measures up at between a tenth and a hundredth of a percentage point. Unlike producers cited in The New York Times article, SolarWorld has never settled a warranty claim under a non-disclosure agreement."
....there was simply no way they would allow any product to be attached to their panels if they weren't 100% certain it was just as reliable as the solar panel it was placed on.
It's taken years for ENPH to gain this trust and it's a huge first step.
The other issue was price. Why integrate a product that if it's only going to have limited appeal because of pricing?
The deal with SolarWorld takes effect about a year from now....and my guess is that's when ENPH is going to be right in the middle of their new effort to reduce prices to a rate below a basic string system (never mind DC Optimizers) .
If these panels are a success others will have to follow suite. Solar City can continue to push an antiquated string system but odds are it will have very limited appeal to SolarWorld's integrated panel. They will just be so much simpler to install, more efficient, have superior warranties and be less expensive. That's a tough combination to beat...especially when you can just join them.
SCON has pulled a rabbit out of it#$%$ for over a decade to keep management employed.
One of the keys to this is always being able to avoid a death spiral deal that so many other companies latch
on to as a finance deal of last resort.
Naturally that spells the end of the company as it's shorted immediately and makes any future secondary's or R/S impossible.
You'll know they are finally at an end if the next round of financing is a convertible/toxic stock deal.
I"m thinking that's exactly why the tank of the last couple weeks.
What would have happened if NRZ hadn't planned for this?
They'd have to float a huge secondary is my thinking.
We'll know if this theory is correct if the share price correct back to over 14 in the next week so.
I'm hoping it takes about a month for that to happen, as I would really like to reinvest my dividends under 13.
Was looking over their "confidential" price list (easy to find on line) as I was trying to see how this buy out will effect ENPH.
Numbers are pretty interesting comparing string inverters to micro....and yea, they sell lots of ENPH's micros.
They break down cost of systems in three segments....3 kW and below....3 to 5...and above 5.
Micros are much cheaper for the 5kW systems and below, but about 30% more expensive for the 5 kW ones and above.
Also found a study by SunEdison where micros were about 45X more reliable than central inverters.
Bottom line....above 5 kW central is cheaper initially...although less reliable and probably at least one replacement over the life of the panels (making it more expensive in the end).
My position is still the same...if ENPH can get their costs down 30% (which they say they can do over time) the market for anything else will vanish.
Of course they're manipulating the price down....they're shorting it knowing they can just cover with the extra shares they get. It's not called a death spiral deal for nothing. UNXL management was either very stupid or very desperate to make this deal. But it's completely legal. Usually this is a funding mechanism of last resort, and it almost always results in the death of the company. The reason is the lower the share price goes the more shares they accumulate. To get out of it you have to raise cash....and how many shares would UNXL have to sell to raise 10M at this point?
Just listening to the C.C.
Pretty clear how this played out the last few months now.
Vivint moved from using just ENPH as a sole supplier to other vendors. As a result revenues from Vivent tanked from around 30% of revenues to 14%.
Clearly those in the know were aware of this major change and bet as a result ENPH would not only miss but guide considerably lower.
The good news is ENPH has been able to replace that loss very rapidly. Other than VIvint they are clearly gaining market share.
But they were right in that it effects growth for next Q by quite a bit. Vivent revenue will be down to 5M...a major drop....where Nahi predicted it would stabilize.
The really good news is other revenues will grow in the 25% range this quarter, meaning no one is eating their lunch/losing market share.
The other really good news is cost reduction. They've lowered the price this year by 10% while keeping margins in the 32% range and stated it will come down aggressively going forward....details to coming out in the "near future".
Bottom line....as usual small investors are the last to know of major events (no longer having a sole supplier relationship with Vivint).