The companies behind the letters - (2)
My brief lighthearted summary continues:
SolarEdge (SEDG) manufactures something called intelligent inverters that “has changed the way power is harvested and managed in solar photovoltaic systems”. Now I don’t have a clue what that means, but I know they have signed up SCTY (SolarCity) the largest installer of solar panels in the US, as well as Tesla for their storage systems. Also Vivent Solar, in second place in installations, recently defected from Enphase, SolarEdge’s main competitior, and Sunrun signed with them in July, etc. SolarEdge is booming. March quarter, revenues were up 18% sequentially and up 183% from the year before. That’s revenues!!! Their adjusted earnings were 20 cents, up from 9 cents sequentially and from a loss of 12 cents a year ago. (I adjusted the previous quarters for the current amount of shares (post-IPO)). I have their PE at 95, but it’s hard to figure as if they make 25 or 30 cents this coming quarter, which will be announced Weds, it would double their twelve-month earnings, and drop their PE in half. Their stock price has been hit by the fall in the price of oil, which has hit all the solar companies. The danger is that they could become commoditized, or someone could build a better mousetrap.
ABMD stands for Abiomed. . They have developed tiny little pumps that go into the heart during surgery and other procedures that are becoming a standard of care. The recently got widened indications from the FDA, and the Dept of Justice just dropped an investigation into their labeling without any sanctions of any kind. Their revenues have been up for 23 quarters in a row. It hasn’t been easy to follow their earnings because they sometimes reported stock-based compensation and sometimes you had to find it in the SEC filings, but they just got a new CFO. My best estimations are a PE of 47, a rate of growth of twelve-month earnings of 114%, and a 1YPEG of 0.41
Infinera, or INFN provides optical transport networking equipment, software, and services to communications service providers, internet content providers, cable operators, and subsea network operators (collectively, ‘Service Providers’) everywhere. To quote FoolishErik’s great writeup: First and foremost, Infinera builds hardware; the software and services, though essential, play a supporting role. The hardware they build enables the optical transport and distribution of information, lots and lots of it, through that global communications labyrinth collectively called the Internet. The keyword here is optical, meaning photons of light are the transport medium over fiber-optic cables, in contrast to the household transport medium of electrons over electrical cables. The software provided goes hand in hand with the hardware; they are inseparable. It is both embedded in the hardware as part of its operating system, and exists in standalone applications with which users tailor, monitor, and manage the hardware’s operations. Basically, Infinera does it better, and the amount of information moved on the web goes up about 50% a year compounded. They only became profitable in 2013. Their last six-months revenues were up 28%, and their six-month earnings were up 143%. Their PE is 41 as I figure it, their rate of growth of twelve-month earnings is 142%, and their 1YPEG is a quite low 0.29
SNCR is Synchronoss, who have a nice cash cow business activating new phones for all the phone providers like Verizon and AT&T, but recently decided to provide cloud services to the phone company customers. The phone companies love it because it makes the customers more sticky, and it means recurring income for SNCR. They are adding about 500,000 new cloud users each week. They are also backing up connected homes and cars to the cloud. This isn’t going to be a world-beater company, but it is a steady grower. Revenues for the last six months have been up 34%, earnings have been up 31%. They have a PE of 23, a twelve-month rate of growth of earnings of 32%, and a 1YPEG of 0.72
Hope you are enjoying this.
Saul
This is more than what I hoped for!