Author Archives: Scalper1
SolarCity Flames On San Francisco Ordinance; Sunrun Sued
SolarCity ( SCTY ) stock flamed Wednesday, leading shares of rivals Vivint Solar ( VSLR ) and Sunrun ( RUN ), on a San Francisco, Calif., mandate requiring that solar panels be installed on most new construction under 10 stories tall. SolarCity stock rose 7.8% Wednesday. It was up as much as 13%. Shares of Sunrun and Vivint Solar rose a respective 3.6% and 1%. Introduced by San Francisco County Supervisor Scott Wiener, the ordinance requires solar panels or a solar-powered heating system be installed on new residential construction shorter than 10 stories and on new commercial buildings smaller than 2,000 square feet. The SF Board passed the measure unanimously on Tuesday. It goes into effect Jan. 1. Current California law already requires 15% of certain new construction to be “solar ready,” meaning it’s in an unshaded area. Wiener’s legislation builds onto San Francisco’s already burgeoning green efforts. In 2004, the city introduced a choice aggregation program dubbed CleanPowerSF. Sunrun Faces Four New Class-Action Lawsuits Over IPO In other solar news, Sunrun became the subject of four new class-action lawsuits on Tuesday alleging the No. 2 residential installer by market value “negligently prepared” its IPO, according to a claim by the Shareholders Association. The lawsuits stem, in part, from Nevada regulators’ decision in December to cut net-metering payments to solar customers. More recently, the Public Utilities Commission opted to not grandfather in existing customers under the old rates. New York, N.Y., law firm Levi & Korinsky alleges Sunrun’s IPO contained materially false or misleading statements related to its historical operating costs “by not disclosing the fixed grid costs being borne for it by public utilities where net metering-programs were being employed.” The claim further alleges Sunrun is charging well above wholesale rates for electricity sold to net-metering customers, didn’t have customers dispersed across 15 states and said “Sunrun’s ability to continue convincing customers to sign 20-year contracts was in jeopardy.” Sunrun went public in August 2015, opening below its 14 IPO price. Shares closed Wednesday at 7.27, 48% off Sunrun’s initial price.
Citrix Grows EPS, Sales Faster Than Modeled After Reorganization
Apparently not too distracted by its reorganization, the highest-rated issue in IBD’s Computer Software-Specialty Enterprise industry group, Citrix Systems ( CTXS ) boosted its Q1 earnings faster than analysts had expected. Reporting after the market close, the maker of cloud management software said Q1 adjusted earnings rose 81% to $1.18 per share, where Wall Street expected 92 cents. Revenue rose 8.5% to $826 million, while analysts polled by Thomson Reuters had modeled $789 million. Citrix stock was up nearly 7% in after-hours trading, following the company’s Q1 earnings release. Shares closed up a fraction, at 80.56, in the stock market today , just 4% off a four-year high of 84.17, hit on Oct. 28. “I am very pleased with our performance this quarter on both the top line and bottom line,” Citrix CEO Kirill Tatarinov said in the company’s earnings release. “The progress we made in refocusing the company — simplifying our portfolio and sharpening our message — is starting to pay off. “We are seeing a strong improvement in our operating margin, and our focused strategy has made it easier for our field teams and channel partners to execute; consequently, we saw improvement in the top line. It gives us a measure of confidence that we are on the right path, and it gives us opportunities to solidify our leadership position in our core areas.” Q1 marks Citrix’s fourth consecutive quarter of double-digit earnings growth following three quarters of 2%-to-7% growth. Profits have outperformed sales, up by only single-digit percentages, now for seven straight quarters. Last week, Robert W. Baird analyst Steven Ashley reiterated an outperform rating with an 85 price target on Citrix stock. He said Baird had surveyed 96 Citrix channel partners and got back mixed results, “consistent with management’s guidance that factored in normal (Q1) seasonality and allowed for possible disruptions from reorganizational activity.” “We continue to believe prospects for improved channel performance are underappreciated,” Ashley said. The company’s reorganization included the layoff of about 1,000 employees and contractors in December and January, the pending spinoff of Citrix’s GoTo lines and a $200 million annual reduction in other operating expenses. In February, Kevin Parker, former CEO of Deltek, was named chairman of the GoTo spinoff, expected to be completed late this year. The third-largest in IBD’s Computer Software-Specialty Enterprise industry group, Citrix boasts a $12.45 billion market cap, half the size of the largest, VMware ( VMW ), but barely smaller than CA ( CA ). However, VMware carries an IBD Composite Rating of 47, compared with CA’s 54 and Citrix’s 92, meaning Citrix is outperforming 92% of all S&P 500 stocks based on earnings, sales, institutional ownership and other fundamental metrics.