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Sunrun (RUN)

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I noticed that CS has a price for the company at $21 per share.

Recent bombing of the area via Vivint and SUNE merger perhaps creates opportunity here?

Price seem to be low

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I bought Sunrun today, reduced costs for modules and hole left by SolarCity due to Tesla merger. I expect a north of $10 by end of the year.

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Sunrun Inc. (NASDAQ: RUN) is one of the stocks that could have massive upside if Credit Suisse is right. Here too the analyst is Jobin, who has an $18 price target, implying more than 200% upside to the $5.00 listed price. The firm sees slowing growth and reduced returns over time and factors that into the valuation. The report said:

Sunrun is the third largest US residential solar installer with 9% market share. The company has a differentiated multi-channel strategy with 1) a direct-to-customer channel and direct installation business, 2) a partner network of lead generators, distributors, and installers, and 3) strategic partners looking to leverage existing partnerships and brand power on the Sunrun platform. Sunrun is also unique by utilizing a customized pricing approach, enabling the company to focus on earning above-average returns, all else equal, instead of approaching each market with a fixed price for solar energy …

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I think the average price is at $12, but recent reductions see $8 or $9 levels.  Having a yieldco in one of my accounts only, I sold the other account, and moved back after gains of one month and securing one payment of monthly dividend. I held CSIQ there, which I sold at $15.31 on  July 13th with a slight increase. 

I am planning to stay away from manufacturers as mentioned before, but I see that installers can make off with lower module prices in the second half of the year. I also expect that SolarCity merger will happen, and the company's disappearance will refocus investors to the rest of the lot.

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7 hours ago, explo said:

Sounds like a smart play to bet on RUN now looking at the stock PPS and the sector ASP.

 

I am hoping that residential solar is not a complete loss for the industry. RUN seems to be growing, although the sector remains a huge risk.  Vivint reports on Monday, and RUN on 11th. It is a bit contrarian to what I would usually consider as a buy, but the cheap material should benefit installations. I am also hoping with the stock that Clinton gets to be a president. Both SPWR and FSLR would struggle with utility, industrial scale solar, as the margins are slim with PPAs while residential could be getting a new lease on life, getting cheaper and therefore wider spread. I am not big on Vivint out of the debacle with SUNEQ. SolarCity is out of the game, and RUN seem to be attracting analysts.

 

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My broker doesn't offer any margin on it and my strategy these days is not really about timing market with switching picks, rather to pick based on long-term outlook and trade the relative PPS changes of the picks, so I'll likely just watch this one from the sidelines although it seems like a good short-term pick.

I took a look at ASP development. Not only module buyers are in favor now. Module sellers that buy their cells (including, poly and wafer, i.e. not just cell processing) seem to retain margins. CSIQ's asset light approach should be less hurt than other CN4.

 

Edited by explo

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From the perspective of preservation of the capital, I would say yes, but isn't a bought cell more expensive than the made cell?

I think the way FSLR operates does not reflect on how any of the CN companies would work. I believe that Chinese could be running during this period a lot more efficient. I need to know how this efficiency looks like from the reporting and the guidance. 

CSIQ will need a lot of money to build in Brazil and Japan unless they will sell those projects or existing projects, it will be tough to show  EPS, and for last five years, EPS is the price maker for stocks of manufacturers. It was not a case for developers (SUNEQ), yieldcos and installers.

I still think we would be able to buy cheaper any Mfg stock in Q4 and Q1 2017 than they are today. I hope I have enough patience with it. 

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The other thing which caught my interest in RUN was the agreements they made with the NRG and Constellation I get they are also doing things with Comcast. So they are using existing retailers to provide entry for solar installation essentially buying contracts from them. So they are not getting in between but along the providers. You can also buy your system from them. It appears that would cover all angles for residential. 

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