20 March 2021
Dear Fellow Investor,
Uncertainty about inflation and rising interest rates has effected equity markets worldwide. The technology focused Nasdaq has lost over 10 % of its value in the past month while the Singapore SGX has risen 10 % due to a heavy concentration of banks, and value focused companies.
In world markets including Malaysia there has been a notable shift from growth to value shares.
We have been holding Nasdaq listed Canadian Solar which has suffered a correction from its highs but has held weekly support. Growth shares are represented in the Nasdaq which focuses on high growth in the future such as Tesla and Zoom teleconferencing . PEs are at nose bleed levels and revenues are uncertain but the investment crowd is willing to chase momentum and higher prices similar to Bitcoin. Higher inflation and higher interest rates would throw a wet blanket over this party.
Despite Canadian Solar being in the Nasdaq and in a growth industry, I will continue to recommend to hold.
PE is 13.7 which is reasonable compared to 1046 for Tesla Tesla is a high growth share while in my opinion Canadian Solar is a value plus growth share or growth at a reasonable price. Value for me is seeing the money now and Canadian Solar is certainly showing us the money now.
On Thursday 18 March 4th quarter results were released and Canadian Solar went up by over 10 % by Friday . Every metric including earnings, revenue and profit margins exceeded analyst’s expectations.
For those of you holding do visit Canadiansolar.com and view the results under the investor relations section and their plans moving forward. My view is that Canadian Solar offers both value and a runway for growth in an industry that will benefit from Biden’s green policies and infrastructure spending.
Weekly chart with a 50 week moving average defining support and a powerful uptrend. Notice the ultra high volume at the right edge of the chart which could be short covering.
Below is some research on solar power and why this trend has a lot of room to run. In Malaysia we have Solarvest which has potential but wait for a price correction before buying.
Five Reasons to Install Home Solar Panels
1. Provides Clean, Renewable Energy
Solar power is a 100% clean, renewable energy source. It reduces reliance on oil, coal, and natural gas for electricity production. These fossil fuels produce harmful emissions that affect the quality of air, water, and soil and are responsible for global warming. It’s estimated that between 2000 and 2065, the Earth will lose more species of plants and animals to extinction than in the previous 65 million years combined.2 That’s a staggering statistic and one driven significantly by the effects of greenhouse gases from fossil fuels.
In contrast, solar energy produces no pollution. The sun's abundant power offers an unlimited energy source that does not strip the landscape or harm the ozone layer. Residential solar energy
2. Gives You Freedom and Control Over Electricity
According to research from Lawrence Berkeley National Laboratory, U.S. households have experienced a steady increase in both frequency and duration of power outages over the last 15 years.3 The United States has the highest number of power-outage minutes of any developed nation. Our electricity grid is 100 years old and was not built for today’s vastly increased population and extreme weather events. California’s largest utility, PG&E, estimates it will need $75 billion to $150 billion over several years to make the grid more secure, a cost that will be passed on to customers.4
Our grid needs to be modernized to meet the increasing demands of a plugged-in society. Adding a home battery unit powered by residential solar panels can store enough electricity to power homes through peak usage hours, thereby giving households the freedom to control their family’s electricity.
BrightboxTM battery storage service along with solar panels, are also a viable buffer against the rolling blackouts introduced by electric companies for wildfire prevention. Today’s antiquated grid means that even communities not directly threatened by wildfires will experience power outages. All PG&E customers are at risk of losing power this summer, impacting up to 16 million people.
With a residential solar system, your home is powered by rooftop solar panels during the day and by energy stored in the battery at night. By installing solar panels, you gain energy independence.
Solar panels and home batteries are becoming more affordable, accessible, resilient, and efficient. They provide peace of mind and energy security for households when the power goes out, or the next storm strikes. Sunrun’s Brightbox home battery system replenishes with energy generated from the sun and removes the inconvenience, uncertainty, and expense of refueling a gas or diesel-powered generator. The clean and silent Brightbox battery is a preferred alternative for many families to a traditional backup generator.
3. You May Save on Your Current Utility Bill
If you’re facing rising home energy expenses, home solar panels can offset your costs.
Savings can even accrue on cloudy days since the sun emits energy through clear and cloudy skies. Solar offers year-round efficiency and savings, even in colder, cloudy climates. Depending on their size, efficiency, and orientation relative to the sun, some solar panels generate more electricity than your home consumes. This could reduce your monthly electric bill to zero. You may qualify for a rebate in some areas if your residential solar power system produces excess electricity. Check with your area’s solar power guidelines.
Most utility bills are rising every year. With Sunrun’s solar service plan, customers pay predictable rates for the next 25 years.
4. Qualifies for Tax Breaks
Another factor in the increasing affordability of solar panels is the federal, state, and local tax breaks. For example, the federal solar tax credit gives you a dollar-for-dollar reduction against your federal income tax. Currently, the residential federal solar tax credit gives you a dollar-for-dollar deduction against your federal income tax equal to 26% of the final cost of solar energy systems you install on your home. This benefit exists through December 31, 2022. In 2023 the residential tax credit will step down to 22%. In 2024, the tax credit for residential solar ends.5
What's more, purchased residential solar panels can improve the resale value of your home. According to Zillow Economic research, homes with solar-energy systems sold for 4.1% more on average than comparable homes without solar power. For a median-sized household, that translates to an additional $9,274.6
5. Costs Have Fallen
The cost of solar has dropped dramatically in recent years, falling more than 70% in just the last decade.1 You’ll save money on maintenance too, since there are no moving parts to break down. In addition, the cost of home solar batteries has dropped substantially as well. The benchmark levelized cost of electricity (LCOE) for lithium-ion batteries has fallen 35% to $187 per megawatt-hour since the first half of 2018, according to research company BloombergNEF (BNEF).7
Take care
Bill
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