You know how sometimes you see a video where some Waffle House customer didn’t get enough syrup with they pancakes and all hades breaks out? Or maybe those videos were a customer at McDonalds who didn’t get enough sauce with the chicken MeNuggets and shoots up the place? After ENPH reported today the AHs action was exactly the same - only different. They definitely didn’t get enough syrup on the pancakes and their chicken McNuggets were ice cold: and then the bottom fell out.
In short - the odds of them moving up the Champico33 Power Top 25 is does not look good at this particular moment.
Here is the ER preview:
Here is the ER Headline:
Here is the CC Transcript:
Here is what happened After Hours:
Now…truth be told, in my knee jerk Custer Syndrome reaction I added a bit AH at around 186 or so. Have I mentioned lately that I am an amateur investor whose mountain range compiled of investing mistakes mirrors the great smokey mountains? Never mind - the question is where to go from here.
What I am hoping is that it goes all the way down to $1 so I can pull a putrid and scoop up a giant amount of the company; although, the odds of either it going down that far or me scooping anything up seems like a sort of a 3/4 court, last minute heave low odds sort of thing. What I really think I am going to do is wait to see if the things breaks below 175 or so and then take it from there although, to be transparent I am not sure quite what my take-it-from there plan might actually be. I am still shell shocked you see.
So I suppose we’ll just have to tee it up tomorrow and see what the new day brings.
Thanks for posting that: it puts a lot of things in perspective and I can only imagine the amount of time you spend updating results for your portfolio companies. I hope any investors that happen to stumble across this forlorn board take the time to review your work. That said - I would like your summary cliff note sort of thoughts - if you are open to sharing.
Way, way back I spent some time in the Yellowstone ecosystem as a grad student tasked with developing and presenting a 30 minute lecture on the regions greatest natural resources and their future potential and effects on the system at large. There were two of us there and while I spent most of my time in the Jackson Hole Cowboy bar - the other student expended a great deal of time in the field and discussing his presentation with local experts. It was a sort of competition.
Anyway - at the end of the summer we both went back to and gave our presentations. His was titled: The Thermodynamics of the Greater Yellowstone Ecosystem and its Potential for Hydro Power Development. The guy had charts and graphs with various tables along with quotes from the area experts he had spoken to. Honestly - he did a really nice job.
My report was titled ‘Our Friend The Beaver’ complete with a picture of a beaver and a pond with a beaver dam.
Now the reason I bring this up - is simply to point out the differences in our investing capabilities and insights. Your prep work and due diligence is comparable to a sort of Thermodynamics of ENPH while my own conclusion runs along the lines of Our Friend the Beaver. However, be that as it may, my conclusion at this very hour is simply this:
It wasn’t Beauty that killed the beast - it was the Guidance. More to my admittedly meager point - tonight the AH damages stopped at the $184 range. You only have to go back to March 17 to find a close at the $183 level - so we are sitting right on that neighborhood. So for me - the question is simply a matter of math - if we don’t breach that March 17 close I am gonna sit tight. On the other hand, if it does go further south - and, continues to trend downward - then I could just as easily decide to demote it to the Bench until it begins to heal.
I really appreciate you posting your chart of the companies performance history.
I loved the Cowboy bar, fell out of my saddle a couple of times, LOL.
Don’t let the chart confuse you with my investing abilities. I just put the numbers in, Excel does all the calculations. I am an amateur investor also.
I agree Champ, They guided flat sequentially on next quarter and it was flat sequentially this quarter. Their growth is slowing down. But their margins are up about 2 percent on Gross Margins and Operating Margins. They shipped almost 5 million micro inverters this quarter and by the end of 2023 they expect to ship 10 million a quarter. They also guided down on the amount of batteries they are shipping next quarter also.
I think Champ they are going to be weak next quarter also but then should be ramping back up. The Inflation Reduction Act should help with their margins and also their sales. California was so wet this quarter I suspect they had many jobs held up and it shows because Revenue was down 9 percent in California. Nem 3 has taken effect in California now but anyone who had their permit in for solar panels by April 14th can still get them installed and grandfathered into Nem 2. Also if you install batteries under Nem 3 you will get all the benefits of Nem 2. So I think the second half of 2023 will be good but until then we could be stagnate. But really Champ in this market I could be all wet because I can’t even see what is going to happen tomorrow with this dang market.
I like these new boards because I wouldn’t have found boards like yours in the old system. It is great to see people trying to find great investments and want to help when I can.
P.S I haven’t read the CC yet just the earnings report
Seems like you need govt incentives to consider going solar.
Imagine some richer folks will keep the party going, but if we are sliding into even a mild recession later in 2023 or 2024, I don’t see people spending money on home improvements.
Covid/WFH was different, with all the free money coming in, layoffs somewhat limited at the time, and anecdotally I know my handyman and others seemed slammed with business during that period.
No free money. Savings are started to get squashed with inflation grinding away. Don’t tell me how m/m inflation calming down…we are still up 8% y/y on top of something like 4% year prior. Check french fries at McDonalds. Check price of 6-pack of soda. Everyone is making more, and that gets passed right back to consumer via price increases to offset labor costs and higher product costs due to all the supply chain nonsense that covid kicked off.
I buy groceries…everything is up. Gas is up, of course. The cost of my annual vacation resort spot of many years is up dramatically the past two years. Forget about going to a baseball game with the family unless they do BYOHotDog Day.
Every burger place on the planet suddenly thinks their burgers should be $10-15. Same with burritos. I am mentally starting to come up with a boycott list…doesn’t matter if I can afford it…I have kids going to college soon, and would much rather spend my extra money on them.
Sorry to say it, but feel we kind of need a recession to reset things a bit.
Or this could be a very long sideways market as we embrace the 1970s vibe fully.
Its all of a green energy play. They sell solar panels, inverters, batteries the whole system. Sales into Europe were up 25 percent, down 9 percent in California and down 25 percent in the rest of the United States. Depending on your energy cost it might not make sense to buy solar system. But in California they get a payoff in 6 to 8 years.
In a positive vein, I have already made about 3k today with ENPH and I did it while having breakfast and a slo-mo jog, more of a shuffle these days, around the lake. Now…bear with me here as I don’t think nearly as well before lunch as I do after lunch and a nice nap. And while I am most certainly using a sort of convoluted, Rube Goldberg style traffic pattern to get there - 3K is still 3K. Course that might not hold till the close.
Earlier ENPH was selling at $163 and some change. It is now selling for somewhere around $168 and some change. So since I didn’t sell at the $163 level I have made a nice profit this morning. I am the greatest investor in the world! Sort of like the Greatest Pitcher in the World:
This is a repeated story:
The parents of a little 9 yo girl are sitting on their porch watching their daughter playing with a bat and softball. The girl looks over at her parents and yells “I’m the greatest Hitter in the world.” She tosses the ball up and takes a mighty swing. The ball falls to the ground and undisturbed she looks at her parents smiling and says - “Strike One”… “I’m the greatest hitter in the world” she cries again and tosses the ball high in the air. Again she takes a mighty swing and again the ball falls to the ground - “Strike Two” she says. She looks at her parents - with a big smile and the confidence only an 9 yo can have and yells once again - “I am the greatest hitter in the world.” She tosses the ball higher this time and times her swing and puts all her strength into it…but she misses again and the ball drops to her feet. The parents say nothing but feel really bad for their little girl who still hasn’t said anything. She is silently looking down and staring at the ball with a disappointed look on her face. The dad slowly gets up and begins to walk to the little girl to give her a hug and help her with her hitting. Then suddenly the little girl’s face lights up she is beaming with a ear to ear smile - she turns to her parents and yells - "I’m the greatest pitcher in the world!
The most successful people in the world all somehow manage to stay positive while solving what others think are mountainous problems. I try to keep that in mind. Just like in baseball, in investing you win some and you lose some; regardless, the game goes on.
So what to do with ENPH. Still not all that sure just yet but the one factor that is gnawing on me just now is simply this: I position my roster for growth. And High Growth at that. So - two options: A) Place ENPH on the disabled list or demote them to the Bench; or B) Cut the company entirely based on the generally acceptable growth investing rule that states quite plainly that to be a growth company you actually have to have growth. Seems reasonable!
And in the scenario that Dreamer presents the decision sure looks a little easier. One of the investing guys I pay a marginal amount of attention to - a local guy who runs a financial advisory service just put out an article that all his various stock stuff indicators are flashing support for the ole “Sell in May and take a hike”. Hasn’t actually advised his followers to do that just yet; but, as a reference point, he has fairly accurately called a calamity or two over the years.