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Thurman J. Rodgers Purchases $4 Million of Solar Energy Company – Insider Weekends

  • September 24, 2023

Key Insights:

  • The solar energy industry as a whole has faced a downturn over the last year, and the solar energy company Enphase Energy (ENPH) is no exception – the stock is down by over 55% in the past year.
  • Enphase Energy specializes in producing a specific type of microinverter that converts DC energy generated by solar panels into AC power that can be used by households and grids.
  • The insider who purchased shares, Thurman Rodgers, is well known in the industry – having founded and led the company Cypress Semiconductors for over 30 years, and having served on the boards of many energy companies, including both Enphase Energy and FTC Solar (FTCI).
  • While the stock has dropped significantly, the company has continued to expand operations, and revenue decline isn’t as significant as perceived by the market.

We’ve written about all sorts of energy companies in the past, but tend to gravitate towards oil and natural gas businesses in our Insider Weekends articles. However, when we saw the $4 million purchase of Enphase Energy (ENPH), we were inspired to take a closer look, primarily because of the insider making the purchase.

TJ Rodgers is a familiar name and we’ve written about him twice in the past – the first after his purchase of the microcap solar energy company FTC Solar (FTCI). In an early April 2023 article on his purchases of FTC Solar, we noted the following:

Last week we saw a string of insider purchases by a former director of FTC Solar when he purchased nearly 90,000 shares at an average price of $2.26. The fact that this was a former director buying stock was a little surprising and caused me to dig deeper. Thurman J. Rodgers or T. J. Rodgers was the Chairman of the Board until January 2023 when he stepped down after serving on the board for five years. He was a founding investor of FTC Solar and has served on its board since its inception in 2017. Shaker Sadasivam, another director who has also been on the board since 2017, will take over as Chairman. The fact that Mr Rodgers is no longer on the board has not dampened his enthusiasm for the stock.

Mr. Rodgers received his Masters and Ph.D. degrees in chemical engineering from Stanford University in the 1970s and went on to found Cypress Semiconductors in 1982. Infineon Technologies acquired Cypress Semiconductor in April 2020 in a $9.4 billion deal.

FTC Solar has dropped sharply from where Mr. Rodgers purchased shares. Just over a week ago, a few insiders of FTC Solar made small purchases of the stock. We were wary of FTC Solar from the start, taking care to note that it was a microcap that was also unprofitable – but hoped the backlog of projects would help turn the company around. However, while the company is moving closer to break even, their top line revenue has been decreasing YoY. The market,recognized this and lost hope, causing the stock price to plummet.

The decrease in revenue is something that Enphase Energy also faced, following the changes in the solar energy market in California. When Thurman Rodgers made a purchase worth over $10 million of Enphase Energy, we wrote the following on the company and the tailwinds that it was benefitting from:

Beyond regional banks, the other insider purchase that stood out last week was the $10 million purchase of Enphase Energy (ENPH) by its Director Thurman J. Rodgers. This purchase was reminiscent of the purchase of the microcap company FTC Solar (FTCI) by its independent Director T. J. Rodgers we discussed in an Insider Weekends article three weeks ago. In that article we highlighted some of the tailwinds benefiting solar energy companies and wrote the following:

Demand for residential solar installation is up significantly in recent years due to federal incentives as well as state mandated standards such as California’s requirement that every new single family home and certain multifamily properties have to install a solar electric system starting in January 2020. However the biggest gains both in terms of efficiency and costs have been on the utility scale solar projects. Thin-film solar cells have seen their efficiency increase from just 8% in 1980 to over 23% this year.

This has helped utility scale solar projects achieve cost parity with fossil fuels and in some cases they are cheaper than fossil fuel powered projects.

Enphase Energy makes microinverters that convert DC energy generated by solar panels into AC power that can be used by households and grids. As outlined by the company:

Today, if you see a home with solar panels on it, there’s a good chance it’s an Enphase home. We have installed more than 58 million microinverters on over 3.0 million homes in over 145 countries

Friends who recently installed solar power in their homes before new rules went into effect in California that reduce the value of credits they receive from sending excess power to the grid (called NEM 3.0), are using Enphase equipment. These new rules have led to a flurry of activity, leaving solar installers backed up for months and causing a pull forward of demand for Enphase’s microinverters.

However, the demand for Enphase and its products has dropped over the last few months – considering new regulations in California, which reduce the value of excess solar energy sold back to the grid. The stock is down over 55% in the last year, and currently sits at around $120 a share – far from its peak of over $300 just under a year ago. And while Enphase has been expanding over the last year or so – acquiring the energy devices software company GreenCom for $34.9 million in cash in October 2022, or expanding operations further into the UK and Australia this month, the company has been hurt by the overall market conditions.

Fiscal 2022 results for the company were promising, with revenue growing by over 69% and net income growing by roughly 173%. However revenue growth over the last few quarters has declined slightly. In Q2 2023 (ended on June 30th, 2023), revenue for the quarter was up by 34% to $711.12 million when compared to Q2 2022 – driven primarily by a 55% increase in microinverter units volume shipped. However, when compared to Q1 2023, revenue declined by a little over 2.5%. Most of the decline is centered around the U.S. market, which saw revenue drop by 12%, but was offset by a 25% increase in revenue from the European market. We may see a continuing decline in revenue over the next few quarters. Valuation for the company remains pretty expensive, with a forward P/E of 35.24 and a forward EV/EBITDA of 18.30, but both numbers are less than what they were when we wrote about the company back in April.

Thurman Rodgers adopted a variant perspective on the solar energy market back in April 2023 with his purchases of both FTC Solar and Enphase Energy. It is interesting to consider that Mr. Rodgers has not continued purchasing shares of FTC Solar but has decided to continue repurchasing shares of Enphase, possibly indicating a greater belief in the prospects for the latter. In our eyes, market conditions for solar energy companies will remain to be poor in the short term, but may improve in the future. Until then, we’ll hold off from purchasing any shares of Enphase Energy ourselves and wait on the sidelines to see how the sector as a whole will perform.

Welcome to edition 700 of Insider Weekends. Insider buying increased last week with insiders purchasing $93.28 million of stock compared to $69.98 million in the week prior. Selling decreased significantly to $548.83 million compared to $2.02 billion in the week prior.

Sell/Buy Ratio: The Insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by the total insider purchases that week. The adjusted ratio for last week dropped to 5.88. In other words, insiders sold almost 6 times as much stock as they purchased. This week, the Sell/Buy ratio was favorable, compared to the prior week when the ratio stood at 28.89.

Notable Insider Buys:

1. Asana, Inc. (ASAN): $17.13

President, CEO, & Chair Dustin A. Moskovitz acquired 1,015,000 shares of this application software company, paying $18.04 per share for a total amount of $18.31 million. Mr. Moskovitz increased his stake by 2.36% to 43,932,649 shares with this purchase.

You can view the list of recent insider transactions for Asana, Inc. here.

P/E: -11.12Forward P/E: -63.44Industry P/E: 24.88
P/S: 6.2Price/Book: 11.25EV/EBITDA: -11.03
Market Cap: $3.76BAvg. Daily Volume: 2,382,59352 Week Range: $11.32 – $27.14

2. HighPeak Energy, Inc. (HPK): $16.86

Shares of this independent oil and natural gas company were acquired by 2 insiders:

  • Chief Executive Officer Jack Hightower acquired 500,000 shares, paying $16.57 per share for a total amount of $8.28 million. Mr. Hightower increased his stake by 12.96% to 4,358,391 shares with this purchase.
  • President Michael L. Hollis acquired 9,829 shares, paying $16.51 per share for a total amount of $162,315. Mr. Hollis increased his stake by 0.67% to 1,477,085 shares with this purchase.

You can view the list of recent insider transactions for HighPeak Energy, Inc. here.

P/E: 8.22Forward P/E: 5.87Industry P/E: 8.58
P/S: 2.33Price/Book: 1.52EV/EBITDA: 3.7
Market Cap: $2.16BAvg. Daily Volume: 551,23352 Week Range: $10.44 – $30.15

3. Enphase Energy, Inc. (ENPH): $119.92

Director Thurman J. Rodgers acquired 32,600 shares of this home energy solutions provider, paying $122.76 per share for a total amount of $4 million. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Enphase Energy, Inc. here.

P/E: 29.98Forward P/E: 18.36Industry P/E: 24.88
P/S: 5.85Price/Book: 16.72EV/EBITDA: 23.83
Market Cap: $16.35BAvg. Daily Volume: 3,759,55652 Week Range: $116.86 – $339.92

4. Broadcom Inc. (AVGO): $829.08

Director Harry L. You acquired 1,000 shares of this semiconductor company, paying $858.96 per share for a total amount of $858,958. Mr. You increased his stake by 39.84% to 3,510 shares with this purchase.

You can view the list of recent insider transactions for Broadcom Inc. here.

P/E: 25.51Forward P/E: 18.09Industry P/E: 24.88
P/S: 9.65Price/Book: 15.51EV/EBITDA: 17.75
Market Cap: $342.19BAvg. Daily Volume: 2,380,66252 Week Range: $415.07 – $923.67

5. SelectQuote, Inc. (SLQT): $1.15

Shares of this insurance company were acquired by 4 insiders:

  • Director Thomas W. Grant II acquired 220,100 shares, paying $1.17 per share for a total amount of $256,637. These shares were purchased indirectly through a trust.
  • President Robert Clay Grant acquired 184,200 shares, paying $1.14 per share for a total amount of $209,988. These shares were purchased indirectly through a trust.
  • Chief Operating Officer William Thomas Grant acquired 150,000 shares, paying $1.20 per share for a total amount of $179,250. Mr. Grant increased his stake by 8.50% to 1,913,851 shares with this purchase.
  • President, SelectQuote Senior Joshua Brandon Matthews acquired 97,500 shares, paying $1.16 per share for a total amount of $113,295. Mr. Matthews increased his stake by 32.13% to 400,937 shares with this purchase.

You can view the list of recent insider transactions for SelectQuote, Inc. here.

P/E: -3.26Forward P/E: -19.17Industry P/E: 9.31
P/S: 0.19Price/Book: 0.55EV/EBITDA: 17.48
Market Cap: $192.85MAvg. Daily Volume: 851,46752 Week Range: $0.51 – $2.94

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Medpace Holdings, Inc. (MEDP): $242.69

CEO August J. Troendle sold 318,072 shares of this clinical research-based drug and medical device development services provider for $258.35, generating $82.17 million from the sale. These shares were sold indirectly by Medpace Investors, LLC.

You can view the list of recent insider transactions for Medpace Holdings, Inc. here.

P/E: 30.99Forward P/E: 25.02Industry P/E: 28.72
P/S: 4.43Price/Book: 18.92EV/EBITDA: 21.97
Market Cap: $7.42BAvg. Daily Volume: 290,03252 Week Range: $145.51 – $282.73

2. Ares Management Corporation (ARES): $104.56

Shares of this asset management company were sold by 2 insiders:

  • Co-Founder & Chairman of PEG Bennett Rosenthal sold 150,000 shares for $104.79, generating $15.72 million from the sale.
  • Chief Mktg. & Strategy Officer Ryan Berry sold 75,000 shares for $104.72, generating $7.85 million from the sale.

You can view the list of recent insider transactions for Ares Management Corporation here.

P/E: 63.37Forward P/E: 20.62Industry P/E: 9.31
P/S: 8.73Price/Book: 11.04EV/EBITDA: 28.97
Market Cap: $31.84BAvg. Daily Volume: 891,74152 Week Range: $58.6 – $107.37

3. Salesforce, Inc. (CRM): $206.43

Shares of this cloud software company were sold by 3 insiders:

  • Chair and CEO Marc Benioff sold 75,000 shares for $213.82, generating $16.04 million from the sale.
  • President/Chief Engineering Officer Srinivas Tallapragada sold 10,000 shares for $215.25, generating $2.15 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Co-Founder and CTO Parker Harris sold 1,250 shares for $214.39, generating $267,987 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

You can view the list of recent insider transactions for Salesforce, Inc. here.

P/E: 130.65Forward P/E: 21.98Industry P/E: 24.88
P/S: 6.07Price/Book: 3.47EV/EBITDA: 27.1
Market Cap: $200.86BAvg. Daily Volume: 5,022,03252 Week Range: $126.34 – $238.22

4. Interactive Brokers Group, Inc. (IBKR): $87.87

Shares of this investment brokerage were sold by 2 insiders:

  • Chief Information Officer Thomas A. J. Frank sold 92,789 shares for $90.67, generating $8.41 million from the sale.
  • Chief Financial Officer Jonathan Paul Brody sold 52,590 shares for $90.42, generating $4.76 million from the sale. These shares were sold indirectly by PJB Holdings LLC.

You can view the list of recent insider transactions for Interactive Brokers Group, Inc. here.

P/E: 30.97Forward P/E: 14.38Industry P/E: 9.28
P/S: 9.38Price/Book: 2.9EV/EBITDA: 20.09
Market Cap: $36.62BAvg. Daily Volume: 968,46752 Week Range: $62.7 – $95.59

5. Atlassian Corporation (TEAM): $195.46

Shares of this software application company were sold by 3 insiders:

  • Co-CEO, Co-Founder Michael Cannon-Brookes sold 41,205 shares for $201.46, generating $8.3 million from the sale. These shares were sold indirectly by a trust.
  • Chief Revenue Officer Cameron Deatsch sold 3,411 shares for $204.14, generating $696,333 from the sale.
  • President Anutthara Bharadwaj sold 2,470 shares for $208.44, generating $514,847 from the sale.

You can view the list of recent insider transactions for Atlassian Corporation here.

P/E: -102.87Forward P/E: 67.87Industry P/E: 25.02
P/S: 14.23Price/Book: 76.89EV/EBITDA: -256.19
Market Cap: $50.31BAvg. Daily Volume: 1,469,25352 Week Range: $113.855 – $246.15

You can view the full list of sales from this Insider Sales page.

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

Disclaimer:  I hold a long position in Atlassian (TEAM). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.