TerraForm Power, Inc. (TERP)

[bodhi 21]

Why is glbl down?

[saush11 38]

16 minutes ago, awindenberger said:

How do you figure this saush?

The $1.75 announced in July was predicated on the Vivint deal happening. I bet TERP will pay $1.60 total in 2016, and likely start off with a raise to $1.50 for the current quarter (so $.375 quarterly payment).

May be I am wrong. Was Invenergy already factored in for $1.75 ? 

[zendoc1love 45]

Not really a very strong showing today for TERP.  The volume was relatively anemic considering that many people's perception was that the Vivint assets were holding back TERP. 

I've been attempting to figure out what is going on by reading most of the day.  I don't really have good insight into this drama filled group of stocks.

Certainly TERP holders are anxiously awaiting the declaration of the dividend.  I can't see SUNE doing anything but allowing the dividend to be given at $1.40 annualized or more.  SUNE needs to have TERP appreciate to have some valuable assets.  SUNE's delay in reporting is still a huge unknown...it will be interesting to see this.

Any other thoughts?

[odyd 1,293]

The same fears, now the deal is off how much is it going cost, what is the liquidity of SUNE and impact of the weak balance sheet against BX.

[zendoc1love 45]

Though Tepper has stated today that an independent TERP would be good.  Does the entire court case get dropped or is there the possibility of continued discussions surrounding governance?  My fear is that everything gets swept under the rug because the VSLR assets are no longer in question and then nothing really is done with regard to the corporate governance issue.  My sense (from reading multiple quotes from Bouchard) is that all who had the ability to look through the transcripts from court realized that Bouchard would rule against SUNE with regard to the take/pay agreement as well as the "rearrangement" of the BOD and C suite at TERP.  SUNE and VSLR knew that they couldn't force the assets down TERP's throat.  I hope that there is continued discussion from Tepper with regard to governance...and I'm fairly certain that there will be because as Tepper said "we don't start things just to start things". 

  The way this went down was not what anyone expected with VSLR pulling out of the deal.  This is one of the points that has me thinking "why?"  The thing that comes to mind is that Vivint wanted to pull out of the deal and throw the first punch before they themselves started to have negative effects from their dwindling balance sheet.  (I would look for a lifeline from BX to confirm this suspicion.)  One other theory is that the futility of the process of merging was realized by all and Vivint wanted to be an active mover. 

My concern for today with regard to TERP wasn't really the price action as much as it was the volume.  Here is the big news that we've all been waiting for and we have volume that is 125% of the average daily volume.  Really?!  I think that the dividend declaration will bring in more volume.  I think that long term TERP will do well under the guidance of Tepper et al, but I think that it will be a bumpy ride....and I'm okay with that as long as the dividends are coming.  Along the way the dividends will be reinvested in other (or same) dividend bearing stocks.  If reinvested in TERP and global the doubling time could be relatively quick if share prices don't appreciate demonstrably.  I have a better overall feeling about the dividend stocks than I do about the CN4.  Too much of my time has been wasted on doing fundamental due diligence that is essentially futile.  I got a 10 bagger on CSIQ thanks to this board and others, but I'm not sure that kind of value will present itself again.

My best to all

[yomama 7]

Good thoughts.  I have been reluctant to move into TERP & GLBL but made that move recently due to much of the analysis that has been put forth on this board.  These are both six figure positions now.  I still hold out hope for JKS with the main catalyst being China coming through on FIT payments which makes their extensive China assets legit.  If those are legit then the realization of earnings being projected will make it at least a double or triple in the later part of this year.  

[odyd 1,293]

Zen well written post. I agree with you TERP is better today than yesterday, but it will take time for all to workout. Next stop is dividend. We get the dividend out of it, things will get better. In the mean time Vivint sued SUNE today. News is out.

[odyd 1,293]

To add couple of observations. I have similar view as Zen on yieldcos. They are they buyers and they are indifferent to solar plants builds, or oversupply if this is coming in some form. Their game is to get PPAs. I think for a good period of a year TERP could simply operate on revenues and show stability, before engaging in equity selling. I also see both easily double from today's prices for TERP enable equity sales and making my another crazy prediction of doing 1 for 1 swap with Canadian.

This would be my third prediction as I have made second prediction on SUNE and this time on TERP, also on SA. I said SUNE was going to have hard time to reach $5, and TERP will be $16 to 22, in the same time. My $70 FSLR and SUNE below $5 did happen, so I am going to put out as many predictions as I can so I can hit one or two. LOL

It is also a lot clearer to me that SUNE was indifferent to VSLR as soon as Einhorn got on board, after the Amendment. I am also thinking that Tepper has been involved in building this scheme. His very good and independent TerraForm comments could be part of some game to buy SUNE shares, play them in deals etc or even settle them with BX.

I was hoping for a swift move, but that move has been played down, I think by immediate filing of VSLR suit. One thing I was afraid that TERP will be named, but it was not and we do not need any weight on those shoulders.

Remember what happened this morning was expected, hoped for and logically argued as the right thing. So we are getting what we want, we just need someone to start paying for it.

 

[ravalos 20]

Robert, I agree with yours' and Zen's view on yieldcos. I'd note however that the real danger to these vehicles at this point is either rising interest rates and/or a severe recession (the bull market is long in the tooth at this point) which would tighten capital markets. I agree that TERP could fly a bit without acquiring more projects and/or growing the dividend much, BUT the whole purpose of the yieldco is to grow the dividend so they might not be able to do this for long. Also, I recently read the 10K from 8Point3 and oh boy is the RISKS section quite big (it runs for about 30 pages) so there are many other things that could definitely go wrong in the course of the business but I think that at least in the case of TERP shares are somewhat undervalued so we have a margin of safety there. After reading VSLR's lawsuit today one could possibly conclude that SUNE was uninterested in the acquisition for a while and that VSLR knew this and that this back and forth with the lawsuit will be a mere formality to the ultimate goal of both: a settlement. They were probably well aware of this prior to all this mess but they just needed some time for confirmation. All in all I am more bullish than ever on TERP given the relief that this cancelled merger poses on the business. I agree with your premise we should see at least a $15 value in the near future. 

[odyd 1,293]

Hi there,

The argument about interest is valid, but companies have always borrowed money, not only is sub-level rates. Why there is a considerable amount of risk to borrow in order to finance solar plant but not a corporate expansion? It is about ability to get return on such borrowing and get enough IRR on it to make it worth a while. When interest rates rise everything else rises with it, including cost of energy. The electricity and PPAs will reflect this. Next the cost to build solar plants will also continue to go down due to over saturation in material's availability and still excessive competition. Top three out four companies sell 5 times modules than they put in their own plants and that number is to rise.

Dividend growth is scaled to growth of the assets, but there is also an appetite for stability and predictability of returns. At 1.60 or $1.70 per share at 10% yield TERP is money maker, and at even 8% you getting into a equity sale potential.

I am very curious about Q4 results and guidance for 2016, I hold  a lot of my view on those results. I think that 2016 can show how powerful TERP is if it is left alone.

From November of last year I asked destiny to stop this merger. Now it is done. I believe in a logical investing, and it appears that logic can get it shot in.

Welcome to the board.

[explo 617]

9 hours ago, zendoc1love said:

Along the way the dividends will be reinvested in other (or same) dividend bearing stocks.  If reinvested in TERP and global the doubling time could be relatively quick if share prices don't appreciate demonstrably.  I have a better overall feeling about the dividend stocks than I do about the CN4.  Too much of my time has been wasted on doing fundamental due diligence that is essentially futile.  I got a 10 bagger on CSIQ thanks to this board and others, but I'm not sure that kind of value will present itself again.

Good post Zendoc. I agree. Especially with the ending conclusion.

[odyd 1,293]

I think the entire declaration of over capacity is going to make the industry difficult to invest in. When larger group (GJ) finds out and it appears that company like Trina offered nothing to combat this, we are going to see drop of value. Selling solar plants will be popular and managing the cost will be of course a king but the companies are offering little to no solution to this and no differentiation, as usual, for investors would be expected.

So we will be playing, living in the 2012/2103 scheme. Now this is the time I got my 10 baggers. I really do not mind from perspective of establishment if we are going to grow solar installations, while companies suffer, only if there is 50% less players when all said and done. I think fundamentals will mean nothing to recovery, but will be necessary not to buy SUNE of 2017, whatever that is. I am excited about having alternatives in yieldcos, I do not put the same level of despair on them as many. I just saw a note about ML putting buy targets on MLPs yesterday. Yieldcos are a lot more stable and I suspect they will out perform CN4.

No longer we can count on 1000% return, but I do not mind going into 100% flips if I can spot them, solar industry can offer that.

Last thought. I spent 5 years being on this site and around 4 on the forum. People say solar is not an investment it is a trading game etc for about 2 years of it. Before it was bad industry etc. I said this once and I will repeat now. Investing by putting away is no longer applicable in our reality. Conventional ways of investing do not apply. I complain a lot about lack of logic in the market, but I still believe logical investing (used to be known as fundamental one) is the best way to go. Logic has a lot more to it than fundamentals as it takes the understanding of behaviorism into account or what the term psychology of the market would describe. This means if it is logical that TERP should double on termination of VSLR agreement, underlying problem like delay of dividend, weakness of the sponsor, most people assuming, but not knowing TERP could be named for damages etc. causes the logic not to deliver. Still in the sum of analysis and behavior owning TERP is the most profitable option, this would be result of logical investing.  I am ok to try become good at it, even if it means that psychology, emotion is playing louder section of the orchestra than fundamentals ever seem to.

[explo 617]

Great post odyd.

[odyd 1,293]

Great post odyd.

Thank you

[ravalos 20]

14 hours ago, odyd said:

Hi there,

The argument about interest is valid, but companies have always borrowed money, not only is sub-level rates. Why there is a considerable amount of risk to borrow in order to finance solar plant but not a corporate expansion? It is about ability to get return on such borrowing and get enough IRR on it to make it worth a while. When interest rates rise everything else rises with it, including cost of energy. The electricity and PPAs will reflect this.

Robert, while I agree with your rationale, I also think depending on the velocity of interest rates rises, it could ultimately hurt some of the existing project returns. These PPAs are very long term (usually 20 yrs) and even though most of them might include a clause for inflation in the sale of energy, it might not be enough to offset a fast rising interest rate environment. It's just one more point to consider in the valuation of these yieldcos, and to demand some premium as a result. Long-term, one would still come out ahead but at any given time the pricing of these vehicles could experience wild volatility due to interest rates. I also think that we are witnessing the beginning of spectacular growth in an infant industry. YieldCos just as REITs and MLPs will be the next big thing as an investment vehicle in the future, specially considering how worldwide countries are adjusting their policies to adapt to the penetration and growth of renewable energies. 

BTW, how do I change my profile picture?

Edited 9 March by ravalos

[odyd 1,293]

Have a read of my article when I touch on the mlp and yieldco comparison. Look at the interest rates on a long term for TERP as well. I do not deny interest having an impact, but I think the risk is manageable. Borrowing for yieldco is not different than any other product, all it is a matter of returns. I would like very much to see long term debt analysis for both.

[ravalos 20]

14 hours ago, odyd said:

I'm still exploring the site so I wouldn't know where to find that article, care to post a link? Thx

[odyd 1,293]

14 hours ago, odyd said: I'm still exploring the site so I wouldn't know where to find that article, care to post a link? Thx

I am on the phone but check top of the page for link called articles

[disdaniel 54]

TERP files 8-k saying no obligation to buy VSLR assets because of VSLR termination of merger

https://biz.yahoo.com/e/160309/terp8-k.html

Not unexpected.

[disdaniel 54]

TERP short interest fell 0.5M shares to ~13M in last two weeks of Feb.

GLBL short interest rose 0.25M to 4.6M in the same two weeks. (that period includes the dip to $2.2/sh and back above $3)

[BIPV Investor 7]

TERP short interest fell 0.5M shares to ~13M in last two weeks of Feb.

GLBL short interest rose 0.25M to 4.6M in the same two weeks. (that period includes the dip to $2.2/sh and back above $3)

Does that mean shorts just paid $1.3m to keep shorting GLBL through its dividend issuing? Sector makes no sense.

[pg6solar 85]

GLBL dividend was not announced until AH on 2/29. There were worries that with SUNE's demise there will be no or greatly reduced dividend (both would have been best case scenario, but potential to follow SUNE to BK was a small possibility too). Stock is up from lows of 2/25 ($2.11) to today's close including dividend ($3.40 + ,0275) by 74%. I would think that short position was greatly reduced on 3/1-3/2 and probably started on 2/29.

[disdaniel 54]

1 hour ago, BIPV Investor said:

 

Does that mean shorts just paid $1.3m to keep shorting GLBL through its dividend issuing? Sector makes no sense.

Won't know about that for another couple weeks.

But they passed up a 2 day ~10M share trading opportunity where share price dipped to the point the most they could possibly gain was ~$10M.

[odyd 1,293]

TERP files 8-k saying no obligation to buy VSLR assets because of VSLR termination of merger

https://biz.yahoo.com/e/160309/terp8-k.html

Not unexpected.

Agree

, but nice to see legal confirmation.

[odyd 1,293]

Ravalos

Have a look at this pic. It shows debt and interest rate blend as well the timeline for payouts. I do not feel we have ticking bomb on our hands with current assets, we talking 9 years for one of the bonds. Moreover, there are options outside of borrowing,

I think we are lucky that TERP has got so much of assets in such a quick time, as we have not been able to see the full capacity production until full 2016. Bottom line debt is not a concern for me. I also believe that within 2016 we will be able see a double price of TERP stock, around $22, I see equity be sold.