All Aboard the Stock-Market Solar Coaster
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All Aboard the Stock-Market Solar Coaster

Much of the climb in solar stocks looks justified by growth prospects, but buyers may still be in for a bumpy ride

By Rochelle Toplensky
Mon, Feb 1, 2021 3:09amGrey Clock 2 min

Solar stocks are sizzling—quite an accomplishment for the simplest and most mature of the green-energy technologies. Finding companies that could keep shining might require looking in less obvious places.

The MAC Global Solar Energy Index has generated a 233% return including dividends for dollar investors during the past year. That is well ahead of returns from wind-turbine makers Vestas and Siemens Gamesa, nevermind the S&P 500’s 15%.

As public and political support for green power has broadened, markets have come to expect a decadeslong renewables rollout. It is hard to see any catalyst for a change in sentiment, says Sam Arie, a veteran utilities analyst at UBS. Solar panels can be the cheapest way to generate electricity in many parts of the world. “In some cases it is even cheaper to build a new solar farm than run existing coal plants,” says Alex Monk, a portfolio manager at asset manager Schroders.

The catch is that the shift to renewables doesn’t guarantee shareholder returns. To justify high valuations, investors need to ensure companies have a defensible business as well as growth prospects.

Solar investors have already experienced at least two stomach-churning cycles. A key lesson has been that making panels themselves is a low-margin, hypercompetitive market best avoided. But other parts of the value chain offer better prospects.

For example, SolarEdge and Enphase make power inverters, which convert a solar panel’s power to alternating current and adjust performance to maximize output. Their Nasdaq-listed shares have returned 179% and 444% respectively during the past year and now trade for 72 and 93 times forward earnings. That is a lot of growth priced in. However, the technologies are patent-protected and could also be central to managing a smart home’s power between electric vehicles, solar panels, batteries and the like—a potentially vast market.

Developers are another option. They bid for, build and run solar farms. While installing the panels isn’t complex, experience is valuable when pricing bids and navigating the permitting process, and scale is crucial to sourcing panels effectively.

NextEra Energy, Enel and Iberdrola have built huge renewable-power farms as part of wider utility businesses and have ambitious rollout plans for solar and wind. Their shares have given investors total returns of between 16% and 28% over a year, and now change hands for between 15 and 32 times forward earnings. Barclays utilities analyst Dominic Nash credits part of the rise to general growth investors coming into the sector for the first time.

Then there are U.S. residential developers, which offer homeowners rooftop solar-panels paired with battery storage. The products provide added reliability, and monthly payments for the cost of batteries and solar panels that are often lower than existing utility bills. “It’s a pretty easy sale,” says Stephen Byrd, an analyst at Morgan Stanley.

Shares in SunPower and Sunrun, two such developers, trade at Tesla-type multiples, 118 times and 360 times forward earnings respectively. Revenues will grow—U.S. solar penetration will rise from 3% now to 14% by 2030, says Mr. Byrd—but margins will also come under pressure once installers compete head-to-head rather than with incumbent utilities.

Investors need to choose carefully as the stock-market solar coaster speeds up again. The general direction of travel may be up, but it likely still has plenty of twists and turns in store.



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Milestone birthdays and anniversaries, weddings, and graduations are momentous life occasions that some like to mark with large and elaborate celebrations.

And the deep-pocketed set are still in catch-up mode after a party-throwing standstill during the pandemic that went on for many months during the height of the lockdowns and social distancing. Bashes since then have become ever more extravagant and experiential—mere get-togethers, they’re not.

Hosts are also seeking any excuse to throw an event and having parties with the same “wow” factor for far less significant reasons, or for micro-occasions as they’re called, and even “just because,” according to luxury event planners who work with this elite set.

Colin Cowie, a planner based in New York and Miami who regularly orchestrates multimillion-dollar gatherings and was behind Jennifer Lopez’s and Ben Affleck’s wedding, calls it the “event revolution.”

“Large-scale events have become the norm,” Cowie says. “The wealthy, who are used to celebrating their life moments in a big way couldn’t do anything during the pandemic and are now going all out for anything they host.”

His company, Colin Cowie Lifestyle, plans 30% more events today than pre-Covid and has a lineup booked for the next two years. An example includes an upcoming million-dollar dinner party in the Hamptons simply to socialise with friends. It’s an affair with free-flowing Dom Perignon, centre-cut filet mignons, and unlimited caviar.

Colin Cowie Lifestyle plans 30% more events today than pre-Covid
Calen Rose

Other high-end planners also attribute the rise of over-the-top celebrations to a “live life to the fullest” attitude that’s become prevalent in the last few years. But they say that these parties aren’t necessarily about spending more than before—rather, they’re increasingly creative, thoughtful, and, with respect to weddings, longer.

Lynn Easton, a Charleston-based planner, says that her typical wedding used to span two days and entailed a rehearsal dinner plus the wedding itself. “Now, it’s a five-day bonanza with events like a groomsman lunch,” Easton says.

Easton also plans glitzy milestone birthdays such as one for a 60th where the host flew 60 friends and family to a private island. Dinners were multi-hour affairs in various locations around the isle with the showpiece being a five-course meal where the food was presented on dishes that were hand-carved in ice.

Another planner, Victoria Dubin, based in New York and Miami, says that, in a new precedent, the weddings she’s tapped to design kick off with striking welcome meals. She recently planned an al fresco rehearsal dinner at the Brooklyn pizzeria Roberta’s that recreated a Tuscan garden. Elements included potted herbs, lemon trees, vintage olive oil cans, ceramic plates, and table cards presented with palm leaves in limoncello cans.

Another planner, Victoria Dubin, recently planned an al fresco rehearsal dinner at the Brooklyn pizzeria Roberta’s that recreated a Tuscan garden.
Aletiza Photo

Pashmina shawls hung from chairs to keep guests warm, and freshly baked pizzas and Aperol spritzes were in ready supply throughout the evening.

Stacy Teckin, the groom’s mother, hosted the party with her husband, Ian, and says she sought to pull off a dinner that made an impression on their guests. “The wedding was delayed because of Covid, and now that we had the chance to celebrate, we wanted to go all out,” Teckin says. “I’m not sure we would have done that before.”

In another example, acclaimed planner Norma Cohen threw a wild safari-themed bar mitzvah for a client.

A four-day wedding in Paris where the ceremony was in a historic chateau and the host paid for guests to stay at Hotel Crillon
Norma Cohen Productions

The memorable occasion transpired at Spring Studios in downtown Manhattan and saw 400 guests be transported to the African plains: Details included mammoth replicas of wildlife such as giraffes and elephants, servers in safari themed attire, and entertainment dressed like giraffes. The event was one of several over-the-top parties Cohen’s arranged recently.

A four-day wedding in Paris where the ceremony was in a historic chateau and the host paid for guests to stay at Hotel Crillon, one of the city’s most luxurious properties, also ranks high in Cohen’s memory.

Then there’s a destination party in London that Cohen planned for a client who was turning 40. It as a six-day affair with dinners at swanky spots such as Cipriani, the Arts Club, and Cecconi’s at Soho House. The finale was Lancaster House, a mansion in St. James, where guests were entertained by cabaret dancers from the famed Ibiza club Lio Ibiza and feasted on prime rib and lamb chops and imbibed on Krug champagne.

“People today don’t want to host events,” Cohen says. “They want experiences that take you away to a different place and make you forget that the real world exists.”