Stop Loss for SolarEdge

By Robert Frick • August 11, 2016

We’re issuing a Stop Loss recommendation for SolarEdge at $16 for half your shares.

Our reasoning: SolarEdge continues to trade lower despite beating estimates by $.04 Tuesday and issuing solid guidance. Revenue grew 27% and earnings were up 42%. Although 2017 estimates have come down since my original recommendation, the stock price reflects much worse numbers. CEO Sella responded to all market fears on the conference call. He noted that Tesla is still shipping all batteries with the SolarEdge inverter and believes it would take Tesla several years to develop a replacement. SolarCity, who Tesla is buying, accounts for less than 10% of SolarEdge’s revenue. He noted the company has not engaged in a price war and stable profit margins backed up this claim. I still like the fundamentals on this stock and the valuation is a bit crazy. It trades for 8 times 2017 estimates and holds $3.00 per share in cash.

However, I appreciate that many subscribers have lost a significant amount of money in this stock and I do not want them to suffer further. I recommend putting a stop loss at $16 on the stock. This means if it drops to $16, I would sell half your position and then wait a bit. I do believe the stock will be higher in six months but have been wrong and surprised by the stock action to date despite being fairly accurate on its fundamentals.

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Jon D.

Jon D.

Hi Linda,
I think members appreciate being notified. I just looked at a chart, which looks good to me today. After being out of this position for awhile I recently reentered at 17.25. Lets hope it hits a new high this month.
My opinion is watching solar it may go up frequently, but also seems to have short interests against the sub sector, which drive it back down again. CRTO was rising nicely but now todays candle is almost like those beacons – can hardly see it. We have to remember we are in the difficult month of August plus in the worst leg of the presidential cycle for mkts.

Melody Pfingsten

Melody Pfingsten

I was also wondering about DOOR. You said to buy, yet i do not see in portfolio. What do you think of the earnings? Down a great deal today…
Thanks,
Melody

Linda McDonough

Linda McDonough

You are correct Melody- it should be listed in the portfolio, I’ll look into that. The stock dropped as all of the earnings beat was due to a lower tax rate. Increased investments in new manufacturing capacity hurt the numbers a bit but will feed future growth. Estimates for the year increased by the $.20 benefit from taxes. I think it’s a great buy here.
Linda

Melody Pfingsten

Melody Pfingsten

Linda, sorry to bug you yet again, but I got this email saying you released details about a tiny tech stony that does nano dot technology. So where is this article? I do not see it.
Thank you!
Melody

Linda McDonough

Linda McDonough

Melody, No bother at all! The stock is Criteo. The full report can be found under the Resources tab.
Linda

Jon D.

Jon D.

I think this is the right area for a comment on SEDG. I wanted to write in yesterday but was too busy. I was wondering how often members look at charts? My coming back to saved charts is only reason I sealed an opportunity was here in SEDG – I took this opportunity. Recently I bt 200 shares since price was so low. one thing I have learned is if a stock rises dramatically profit taking will push it down and I need to be getting a profit. if you look at enclosed chart we see yesterdays candle has a vertical line called a wick, or shadow the top end is the high the lower end of this line meets the horizontal top or close of the day. I bt at 17.25 and sold 1/2 of the shares at 18.43 So finally I felt I had a profit on one stock yesterday. look below to volume area volume was very strong it is said volume precedes price, today we need to check the price action again. I have a fast short term MACD below volumeit has been positive and same for the PPO indicator. we can see $ is beginning to flow back in and scoters has made a strong move up from Aug 4th – 11th.

I assume some members are investors and some are traders. I am just trying to point out how I look at charts daily for positions I hold, and how this made my best chance to have a positive day yesterday. hope your trading day goes your way today: http://schrts.co/QGHRDX

Howard

Howard

Hello Linda,

Would it be possible to include your option trades in the OFI/VT sms text alerts? I’m not so concerned about the equity trades.

Thanks,
Howard

Linda McDonough

Linda McDonough

Hello Howard,
Yes Profit Catalyst Alert option trades should come through as a text alert. They will be separate from the OFI/VT alerts.
Linda

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