...and I think ENOC's relative price action today -- currently down .8% in a NAZ that's up 1%.
The prospect is for the May 7 report to contain the same outlook offered only 3 months ago, that went out for 3 years. Yes, En-Tech is exciting and there will be colorful headlines and commentary. But to the extent guidance has 2014 earnings remaining at a mid-point .75 GAAP, any overextension on the pps is going to crash hard.
This too, is a hallmark of ENOC reporting periods, for those of us who have been around long enough to see these cycles.
That's my bet, and why I have the position I do now.
Always ready to stop out super quick, because you are right that ENOC can run hard. Either way.
I'm generally long ENOC for all of the reasons you stated. The volatility, however, offers opportunity for trading around a core position.
The story stock nature of Enernoc's business, combined with the thin float and (what seems to me like) a fair amount of market maker manipulation drive this.
Currently, the $23 pps is approximately 30X current earnings, and 20X+ forward earnings. For comparison, Apple's multiple is something like 12X (not sure exactly, but close).
The opportunity you described does not exist in a vacuum. Yes, Demand Response "Penetration" will grow. But what about Enernoc's share of this business versus its competitors? The payout in Europe is a ways out. The further out you go, the more risk there is of technology, financial, political, competitive, and all other sorts of disruption versus today's vision.
In Japan, there are several players competing.
It was in recognition of these limits on the size and composition of the DR Market that ENOC diversified, first into efficiency and sourcing -- and then into a SaaS integrated approach.
While super nifty, timely, relevant and utlra cool, I have seen no revenue, earnings or cash flow models for this re-flowed company, and the Company itself has told us to expect 15% growth annually for 3 years. Not the stuff of a 30X multiple, and why I think we're overstretched here at 23.
...and seeing 15% earnings growth forecast for three years. That's it.
The recent acquisition is qualitiatively very interesting, but not accretive to earnings in any significant way.
Europe, Japan and Australiasia are awesome, but they've been baked in.
PJM is still a big piece and still a risk. Even a headline risk.
So I think, still 2 weeks before earnings, this is one of those times where the pps got ahead of itself again, given the markets bounce (which may be fading in the existing downtrend), all of the PR's the other day, ENOC's continued "story stock" attraction and the thin float.
They're gonna have to SHOW something on the revenue and profit model, at least, for me to buy into a multiple increase or earnings-driven increase.
I saw in one of your posts that by the late 60's, earely 70's, you were working for a NYSE member firm. That you're now retired and living in Naples?
Me, I'm a mangement consultant (marketer by trade) who's been both actively investing and day trading for years. Sure I've learned to win in this game, but that was after years of "learning losses" and I still trade by the seat of my pants. Evidence yesterday. I captured 4+ percent on that trade so i'm not complaining. But then I left a lot of dough on the table as the pps shot to 21.80 (my last sell was at 21.075). I wasn't looking at the order book, and wonder, had I been, would I have seen all of the support developing, and not bailed so early.
There's that, and I don't play with options, which for this stock especially, as you have pointed out could be profitable.
I guess what I'm trying to say is, you seem passionate about this, a long-time pro, and highly knowledgeable technically, about lighting, at least (some of your CREE posts have been very educational).
I for one would welcome your sharing some of that knowledge on this board, if you want to. I learned a lot over the years from posters with your apparent background.
Now out completely on the trade at $21.075. My father taught me not to "look a gift horse in the mouth."
That trade was sweet. Thanks again ENOC volatility.
Thanks Shabdul, G/L.
Just sold 40% of my ST position at 20.80, with average cost of 20.08. Two winning trades in row (first short, then long), but it took a few months off my life! I don't know about seeing 19 again before the next earnings period. I think the fundamentals support at least that level, but the tremendous hype and SaaS teasers (to keep upward pressure on the multiple) were well played by ENOC, and I believe providing us with the premium I mentioned in a previous post. I believe we could easily hover 21-22 between now and earnings in early May, possibly seeing even 23+ heading into earnings. All of this, of course, is net of April expiration (which has seemed like a war between option sellers and buyers the past two months), and the condition of the broader market, which still seems dicey. G/L Shabdul.
I agree. My cost is currently $20.08 and I feel good about the position. The ultra high multiple players are collapsing and dragging the market with them. Could be more downside, but I think we're OK as long as broader market-wise, this isn't the "big one."
Had started with a very small position. Bought some more this morning (twice my inital position) at 19.58. So I'm averaged a bit over 20, still with a manageable position.
I'm seeing a market downdraft, in between earnings, now down to a level I feel more comfortable with to add. It's still very dicey, but I'll stick in longer, if need be, than a day trade for this one.
More room to add below, but won't go crazy in case there is news we retail investors don't know about. But this whole thing looks market driven (and market-maker driven)! so I'm gonna stick with it somewhat lower, looking toward a market stabilization or recovery (hope it's not the dreaded "correction" on this round). Still ready to stop out for a manageable (if not frustrating) loss if we start spiralling down below 19. Just can't see it, unless something wrong with ENOC. Time will tell!
Nice move Motsam or Shabdul (I forget who) sold half position at 23 something.
Shorted again at 21.82. Not a whole position for all reasons previously stated.
S&P is at 1890 and I dont see it going higher this week. There will be market trepidation leading to the employment numbers tomorrow, ENOC outlook was milktoast, and we're still over a month from earnings.
Finger stays close to the trigger to cover and keep losses less than average trading gains. A month from now, as we look at forward opportunities for the company (ie progress in Japan, Europe, and with the Software Business), the outlook will be completely different than today's short term view, which seems soft to me, price-wise.
If it rockets, I'll be first to run for the hills. But I see sub-21 before any rises based on legit news and earnings potential.
"I sold for a profit at 22.06 and shorted at 20.11"... No, 22.11. Yesterday at around 12:30 pm. Second time I did that! I guess I'm just not used to saying 22-something and Enoc in the same sentence! And maybe now I have to start proof reading before I hit the post button.
I had held a small trade long with an average cost of $20.52. I sold for a profit at 22.06 and shorted at 20.11 (a small position I can add to if necessary, or stop out if the rise continues.
I saw the fly on the wall post - reiterating Cannacord's outlier $30 price target. Every time that gets re-posted, it feels like pump time to me. Sure enough, a 10% pop. But this comes off somewhat disappointing earnings (more specficially, a so-so outlook with slow to moderate growth). I don't yet understand the revenue model for the conversion from a DR company to a software company. I'll be the first to admit that such understanding may be out there and I'm not studied up enough. Someone help me please, if that's the case.
Otherwise, I see forecast 15% growth, basically flat earnings forecast at a .75 midpoint in 2014, and no concrete indication - yet -- of the acquisitions being accretive to earnings, or the new Japanese or European initiatives ramping up earnings either. Unless they're sandbagging, the recent 10K and the outlook confirm this, when you get through all of the visionary language.
I appreciate that vision, am a long term supporter of the company, and believe it will grow. But this fly on the wall posting, the 10% pop, the razor thin float, and the last day of the month when institutional window dressing dominates, all recipe for a big pop. The volatility in ENOC has been wonderful to trade, even though the option sellers often move things around, particularly around expiration.
We'll see if it falls off this week, if the buying pressure eases and the sharks move in. I really like this company. I could sing its praises, and have, for years. And I'm not an ENOC shark. But I have no trouble being a pilot fish when I see a huge spike that appears pr-driven, on the last day of a quarter, with this float and a history of not holding these gains when achieved for these reasons.
Finger on the trigger too, cause we know ENOC can run. G/L and greetings to all.
As a short term trade. My bet is this pop got ahead of itself. And the Koreans are shooting at each other.
I'd like to possibly post while I have the position. I believe it's disinenuous to not state one's position, as opinions are always flavored by it. We're human. And if I get blown out -- lose the trade -- that's transparent too.
Greeting and good luck to longs. I remain one long term, but playing the volatility in ENOC has been very good to me.
I thought it may be more the Fly on the Wall Post from this past Thursday with a re-statement of Cannacord's outlier target.
The only problem is, this sparks a retail frenzy on the thin float, which I think we jus we just saw play out (and sparked by the NAZ recovery).
Steam goes out of that pretty quickly, and we're a month + away from earnings, which are forecast to be nothing special.
Nice pop, but not sure sustainable till we see some new news that will impact cash flow and earnings.