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TerraForm Power, Inc. (TERP)

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On 11/24/2015, 2:23:36, explo said:

Yes I didn't like this reshuffling at all. It's like they want to prevent TERP from distancing itself from parent. Risk of buying from SUNE at bad terms now. Is this really ok behavior?

 

Explo,

If this is a concern, what makes yo buy? Thanks in advance.

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I still believe that yieldcos were a way of salvaging assets created by a now broken company. It's hard for me to see these big publicly traded companies with many recent offerings on Nasdaq to be pulled down in a parent BK. Too much of a scandal, which would undermine the whole idea of listing subs. SEC and stock exchanges etc. might be stakeholders in how this play out.

Adding one more independent director for majority independents on the board might compensate for SUNE CFO becoming TERP CEO. Maybe that move was a gift of afterlife to the CFO (I'm sure he must have been under stress being resposible for SUNE finances).

Also I don't expose much on a single stock anymore, so a failed double down bet is not a big issue. My portfolio can carry losing bets. Hopefully I make more winning than losing bets though.

 

 

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I see several people dipping into TERP in here, even with the major down days it has.  can someone tell me the reasons they are interested in it ?   whats the fundamental story here ?

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I see several people dipping into TERP in here, even with the major down days it has.  can someone tell me the reasons they are interested in it ?   whats the fundamental story here ?

I added TERP (hesitantly) solely because of the downgrade today.

Trying to take advantage of the panic sell the downgrade caused, and hoping it pops tomorrow.

Gulp.

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Primarily the ~19% dividend yield, secondarily lots of quality solar and wind generating assets in the US selling for ~$0.50 on the dollar. 

I am also counting on SUNE walking away from Vivint--that has to be the stupidest move in solar this year.

Nixing the deal would boost both companies (SUNE and TERP) 50% overnight imo

TERP lists $5/cash and $15 book value, admittedly market doesn't care about that right now.  I have been wrong before about solars, but this looks like a slam dunk investment to me.

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5 minutes ago, disdaniel said:

Primarily the ~19% dividend yield, secondarily lots of quality solar and wind generating assets in the US selling for ~$0.50 on the dollar. 

I am also counting on SUNE walking away from Vivint--that has to be the stupidest move in solar this year.

Nixing the deal would boost both companies (SUNE and TERP) 50% overnight imo

TERP lists $5/cash and $15 book value, admittedly market doesn't care about that right now.  I have been wrong before about solars, but this looks like a slam dunk investment to me.

Thank you all for your input

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18 minutes ago, disdaniel said:

Primarily the ~19% dividend yield, secondarily lots of quality solar and wind generating assets in the US selling for ~$0.50 on the dollar. 

I am also counting on SUNE walking away from Vivint--that has to be the stupidest move in solar this year.

Nixing the deal would boost both companies (SUNE and TERP) 50% overnight imo

TERP lists $5/cash and $15 book value, admittedly market doesn't care about that right now.  I have been wrong before about solars, but this looks like a slam dunk investment to me.

 

Disdaniel, thanks for your input. How much of TERP's $5/cash be affected if SUNE goes BK? 

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6 hours ago, lepv123 said:

 

Disdaniel, thanks for your input. How much of TERP's $5/cash be affected if SUNE goes BK? 

You have asked this question again. TERP's cash is not SUNE's it cannot be used to pay SUNE debt's and vice versa. TERP is a gross profit producing company with more cash than parent company today.

SUNE may continue to sell projects to TERP, but I see no reason to abuse pricing mechanisms by SUNE. It would be simply stupid. Logically well treated yieldco, unchanging dividend policy will provide calm waters for yieldco growth.

Read this article about Abengoa Yield. Both yieldcos are independent companies. I prefer TERP as they have larger dividend and they have North American assets over GLBL.

http://www.bloomberg.com/news/articles/2015-11-25/as-abengoa-struggles-abengoa-yield-makes-plans-for-future?cmpid=yhoo.headline

TERP has no reason to fold. I am not sure how UBS assigned them $6 per share, but this reminds me an ignorance of the RBC analyst saying that FSLR was a $30 stock. The world is full of idiots everywhere and they play games for other people.

I feel uncomfortable about obligations made by SUNE, but I see no reason for TERP to have a problem live on.

My only concern is that dividend could be lowered as the yield is impossibly high. Is this necessary? Absolutely not, but SUNE patronage has not been particularly keen in some places like Vivint. 

The situation reminds me credit crisis of 2008 and secularized mortgage companies. Some had died, but some recovered and went ballistic in turns. When I look at TERP the balance sheet I see no risks.

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BlueMountain was buying yesterday they got over 9M shares, I imagine their average is higher than mine. I also think they are buyers today. 

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1 hour ago, odyd said:

You have asked this question again. TERP's cash is not SUNE's it cannot be used to pay SUNE debt's and vice versa. TERP is a gross profit producing company with more cash than parent company today.

SUNE may continue to sell projects to TERP, but I see no reason to abuse pricing mechanisms by SUNE. It would be simply stupid. Logically well treated yieldco, unchanging dividend policy will provide calm waters for yieldco growth.

Read this article about Abengoa Yield. Both yieldcos are independent companies. I prefer TERP as they have larger dividend and they have North American assets over GLBL.

http://www.bloomberg.com/news/articles/2015-11-25/as-abengoa-struggles-abengoa-yield-makes-plans-for-future?cmpid=yhoo.headline

TERP has no reason to fold. I am not sure how UBS assigned them $6 per share, but this reminds me an ignorance of the RBC analyst saying that FSLR was a $30 stock. The world is full of idiots everywhere and they play games for other people.

I feel uncomfortable about obligations made by SUNE, but I see no reason for TERP to have a problem live on.

My only concern is that dividend could be lowered as the yield is impossibly high. Is this necessary? Absolutely not, but SUNE patronage has not been particularly keen in some places like Vivint. 

The situation reminds me credit crisis of 2008 and secularized mortgage companies. Some had died, but some recovered and went ballistic in turns. When I look at TERP the balance sheet I see no risks.

 

Thanks Odyd for your explanation and knowledge. I'll definitely read that article. I'm also trying to read more to understand the relationship and dynamics between SUNE and TERP. Don't know why it's so confusing for me. As little as I know, I have a strong gut feeling that TERP at this price is a great bargain.

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BlueMountain was buying yesterday they got over 9M shares, I imagine their average is higher than mine. I also think they are buyers today. 

Very important point.

Big boys buy when everyone else is selling.

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Good post odyd. I like the link on the parallell ABY case. Seems to develop as I hope there. I hope for the same with TERP and GLBL.

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Based on the downgrade from UBS, which involved personnel changes at the companies, which are the most idiotic arguments one can create. The argument is that Yieldcos liquidity to be sacrificed for SUNE.

SUNE is pressured and selling projects could be tough under conditions as prices are depressed. Selling to yield at market prices would be right. What they did with Global was a right decision. Selling own projects instead of buying third party. This was a good business decision and if it was made by the change in a board than this good.

I quote issue on TERP

As for TerraForm, Dumoulin-Smith believes that the changes to its management team signal that SunEdison will "extract meaningful liquidity" from it. The analyst thinks that SunEdison will take a number of "value destroying steps," including a reduction of TerraForm's value by $2.50 per share to finance Invenergy's warehouse and a $4.50 per share reduction in value to finance an additional 500 megawatts of energy production through 2020, the analyst predicted. TerraForm acquired $2B of wind energy projects from Invenergy earlier this year

I checked all transactions, They were planned and made in July. This one for Invenergy, which I consider great purchase is linked.

http://www.prnewswire.com/news-releases/terraform-power-and-sunedison-announce-acquisition-of-930-megawatt-contracted-wind-portfolio-from-invenergy-for-2-billion-300109204.html

How is the July event affecting rating on the company In November? Unless he is as good as Gordon, who does not know business profiles and events at the companies, so he missed July transactions above he said in August after the fact following:

UBS maintained a Buy rating on TerraForm Power (NASDAQ: TERP), and cut the price target to $30.00 (from $34.00) due to an increase in UBS' dilution assumption, as the stock continues to decline. Management affirmed its ability to achieve 2016 DPS implying that the IDRs are still achievable, but Analyst Julien Dumoulin-Smith questions the sustainability and growth beyond that point.

Dumoulin-Smith commented, "As we have stated previously, we reiterate our preference of TERP over SUNE as a result of the more favorable risk-reward associated with the YieldCo. The reduced downside is attributed to the asset ownership at the YieldCo level, with TERP holding a significant portfolio currently, even in the downside case—assuming no additional dropdowns. Additionally, we expect SUNE to continue dropping assets into TERP at lower margins than they would sell in the open market in order to pursue accretive growth at TERP. Critically, SUNE continues to see TERP as the nucleus of its story."

Pow, so in August those transactions, which are semi TERP only, were worth $30 and now are problem to turn to $6. Reality is the the Dumoulin-Smith is just a paid mouth piece, who was told to downgrade.  It is clearly not SUNE influenced, but third party transaction. Shameful.

 

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Definitely you are right ODYD. All those "downgraders" are paid for providing their payee "ideas". In reality my only concern is: the same governing in all 3 companies   (SUNE, TERP and GLBL).

SUNE execs. team proved to be weak and incompetent. Just a simple comparison to CSIQ/FSLR management actions tells the whole story. Probably Mr. Market does not believe in SUNE guys ability to make right decisions despite all the support provided by deep pocket lenders. I exclude from this valuation a fraud as a conspiracy approach though a probability of dirty plan set from the beginning is high enough to put it aside. 

JMHO:

TERP share price is  close to the bottom though a further downside is still possible.

SUNE eventually will go under. In this case it is an interesting question how SUNE assets will be redistributed among its subsidies.

     

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Is the debt that TERP holds dependent somewhat on their market cap?

Does anyone know what are the terms of their debt?

I'm thinking that building a position in TERP is prudent, but I am concerned about their ability to continue to service their debt obligations. 

Thanks for everyone's input on this one...it's confusing but exciting.

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9 hours ago, alex_iff said:

Definitely you are right ODYD. All those "downgraders" are paid for providing their payee "ideas". In reality my only concern is: the same governing in all 3 companies   (SUNE, TERP and GLBL).

SUNE execs. team proved to be weak and incompetent. Just a simple comparison to CSIQ/FSLR management actions tells the whole story. Probably Mr. Market does not believe in SUNE guys ability to make right decisions despite all the support provided by deep pocket lenders. I exclude from this valuation a fraud as a conspiracy approach though a probability of dirty plan set from the beginning is high enough to put it aside. 

JMHO:

TERP share price is  close to the bottom though a further downside is still possible.

SUNE eventually will go under. In this case it is an interesting question how SUNE assets will be redistributed among its subsidies.

     

Hi Alex,

I am not sure if comparison of CSIQ or FSLR is a fair one when it comes to skillset of SUNE execs. I look at companies based on their performance financially and this is why SUNE looks bad, but not same can be said about TERP, and we can clearly state the same people are behind two companies from the beginning.

SUNE's failure is in its profile. In particular the material business. If you consider 27% GM on energy and 10% on selling plants, without materials they would be ok, if not the stupid emphasis on buying anything solar. I think they can rescue themselves if they walk away from the Vivint acquisition and take bullet for poly plant. They will be like a huge Renesola building plants when done.

I think this will require being more savvy than what we seen to this point. I cannot certainly buy billion dollar deals, but SUNE did. Bankers are ridiculous enablers at times and people who are being told they can do anything usually do stupid things at one point in time.

I hope that SUNE execs get the cold shower and do the right thing. Everyone knows what that is. Refusal to walk on Vivint will make the world tough for all.

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