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Enphase Is Capitalizing On The Booming Home Energy Market (NASDAQ:ENPH)

Enphase Is Capitalizing On The Booming Home Energy Market (NASDAQ:ENPH)

The solar industry has been on fire over the past few quarters. Solar MLPE giant Enphase (ENPH) has been on a particularly solid run and continues to surge upwards. Despite an ongoing pandemic, Enphase has approximately quadrupled in market capitalization since March.

Enphase is an increasingly dominant force in the promising solar MLPE space. The company is also successfully moving into the even larger home energy industry. Enphase is at the forefront of a rapidly changing distributed energy industry and continues to innovate at a rapid rate.

Strong Performance Continues

Enphase continues to be one of the strongest performers in the revitalized solar industry. The company has consistently outperformed expectations, which has contributed to the company stunning rise over the past year. While the company’s Q2 revenue of $125.5 million decreased ~6% Y/Y, this revenue figures still impressive considering the industry-wide impact of COVID-19.

Enphase has transformed from one of the most overlooked solar companies to one of the largest solar companies in the world. The company’s success in the MLPE space, particularly with microinverters, has allowed it to expand its reach far beyond just solar MLPE products. Enphase is now a serious contender in the far larger home energy market.

Enphase has seen its value skyrocket in recent years.

Data by YCharts

Source: YCharts

Expanding Reach

The energy industry is set to undergo dramatic changes in the coming years. The arrival of cost-effective solar PV and energy storage is changing the dynamic of how energy is delivered. The residential market is already starting to transform with the arrival of cost-effective distributed energy.

Enphase is contributing greatly to this transformation with its innovative solar MLPE products. However, the company is now starting to dramatically widen its addressable market by moving into the wider home energy market. The opportunities in the

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3 Ways To Get High Yield From A Booming Residential Market

3 Ways To Get High Yield From A Booming Residential Market

Co-produced with Beyond Saving

Invest In Real Estate Now, Opportunity Won’t Last

For the past few months, we have been discussing how strong the residential real estate market has been despite the economic impact of the pandemic. While Wall Street has been very skeptical, but the strength is undeniable.

Interestingly, while the fundamentals are proving to be very strong, many residential focused investments are very cheap, with many trading at multi-year-low valuations. Today we take a look at three different ways investors can take advantage of the strong residential market and achieve high-yields from this very strong sector.

Way #1: Non-Agency Mortgages

For single-family homes, homeowner equity continued to climb in Q2 2020 despite the pandemic. Homeowner equity increased $620 billion, or an average of $9,800 per home. This means that the number of mortgages that are underwater continues to diminish and the vast majority of mortgages are under 80% loan-to-value.

Source: Corelogic

Meanwhile, the price for investors to buy mortgages has materially declined. Investors today can buy mortgages cheaper, while the value of the collateral real estate is climbing.

One way investors can gain exposure to this is through non-agency mortgage backed securities (‘MBS’). These are packages of mortgages that are sold to investors who then hold them, collect the cash-flow and have the option to sell them in the future.

Improving equity positions helps non-agency MBS is a few ways. First, a homeowner with significant equity in a home is very unlikely to walk away. If you have a $300,000 home, it might make sense to let the bank foreclose if the mortgage is $290,000+ and you can’t pay it. If the mortgage is 80% “Loan-to-value” (or LTV) and you only owe $240,000, you are not going to walk away from $60,000+ in equity because you are

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