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We have heard for years how solar could actually become a large part of our energy production and use, and how the clean nature of it would help in reducing carbons in the atmosphere. The problem is that currently it is still hard to adopt on an individual basis. Tesla founder and CEO Elon Musk is working on a shingle that can be installed on roofs that could capture energy. Many feel that building integrated photovoltaics (BIPV) will be a huge part of the future.
A new and giant research report from Deutsche Bank points out that declining solar costs are driving growth. The report noted this:
Despite reaching grid parity, solar sector growth is still much dependent on utilities and government policies. We expect further cost reductions in solar and the emergence of low cost storage options to drive unconstrained solar growth in several markets starting from 2019-20 time frame. The transition will create significant investment opportunity for traditional clean energy investors. Further, we believe that forward-looking utilities will increasingly look to find opportunities to incorporate solar into their business models.
The analysts have three top picks, and all are rated Buy at Deutsche Bank.
This top clean technology/solar company remains a sector leader. First Solar Inc. (NASDAQ: FSLR) operates through two segments. The Components segment designs, manufactures and sells solar modules, such as CdTe modules that convert sunlight into electricity for project developers, system integrators and operators of photovoltaic (PV) solar power systems.
The Systems segment provides turnkey PV solar power systems or solar solutions, such as project development; engineering, procurement and construction; operating and maintenance; and project finance services to investor-owned utilities, independent power developers and producers, commercial and industrial companies, and PV solar power system owners.
The potential for tariffs on crystalline silicon wafers could push up the price on the thin-film modules sold by the company. A 10% increase in the average selling price of the modules could easily push the company earnings higher in 2018.
The Deutsche Bank price target for the stock is a whopping $65, while that Wall Street consensus target is $53.58. The shares closed on Friday at $48.21 apiece.
Deutsche Bank thinks this top company is gaining market share. Sunrun Inc. (NASDAQ: RUN) finances, installs and services solar power arrays on customer premises. The company acquires customers directly, as well as through a partnership model. Most of the company’s solar installations are leased from Sunrun by its customers, with a smaller portion of the business comprised of systems sold to customers outright.
Back in the summer, the company announced a partnership with Comcast as part of its marketing efforts to educate customers about the cost savings of residential solar. Sunrun has already doubled its addressable market, as the company’s products are now available in 22 states. With solar growth rates slowing, the company’s efforts to lower costs could boost sales.
Deutsche Bank has a massive $12 price target, and the consensus target is $10.38. The shares closed trading at $5.58 on Friday.
This stock has had a strong run this year and looks poised to go even higher. SolarEdge Technologies Inc. (NASDAQ: SEDG) designs, develops and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in Israel, Europe, the United States and elsewhere. The company’s DC optimized inverter systems include power optimizers, inverters and cloud-based monitoring software. Its products are used in a range of solar market segments, including residential, commercial and small utility-scale solar installations.
SolarEdge sells its products directly to solar installers, as well as engineering, procurement and construction firms, and indirectly to solar installers through distributors and electrical equipment wholesalers, as well as PV module manufacturers.
The $30 Deutsche Bank price objective may go higher. It compares with the consensus estimate of $27.27. The shares closed Friday at $28.81.
After having been on the market for nearly two months, the Houston Rockets found a buyer for the franchise — a billion-dollar buyer in fact. It was announced last month that Tilman Fertitta would be acquiring the Rockets for an unprecedented $2.2 billion. Now the sale has closed.
The NBA Board of Governors unanimously approved Fertitta to join the ranks of an NBA owner yesterday, setting the stage for the commencement of the Fertitta era.
The most recent NBA sale was the Los Angeles Clippers, which sold for $2.0 billion in 2014, the largest price tag for an NBA franchise at the time. The Rockets have now taken the top spot.
Previously, Forbes had valued the Rockets franchise at $1.65 billion in February, putting it around the eighth most valuable franchise in the NBA. The Forbes list of the top 50 most valuable sports franchises ended around $1.75 billion, so the Rockets didn’t make the cut. Although, Forbes made a point of saying that there were about 36 other franchises that were valued upward of $1 billion.
Back in the early 1990s, Fertitta made an offer to buy the Rockets for $81 million, but the team went to — now former owner — Leslie Alexander for $85 million at that time. This came just before the Rockets won their back-to-back championships.
Fertitta was a former limited partner of Charlie Thomas when he owned the team back in the early 1980s. Fertitta paid a record price for the team of $2.2 billion dollars to former Rockets owner Leslie Alexander.
Fertitta owns the Golden Nuggets Casinos and Landry’s restaurant group, which includes Bubba Gump Shrimp, Rainforest Café and Morton’s Steakhouse, among others.
One piece of trivia worth pointing out: The last time the Houston Rockets were sold, the team won the championship that following season. Considering the moves that the Rockets have made in this post-season, they are easily one of the best teams in the Western Conference and could be a contender this year.
OCTOBER NEWSLETTER 6
The White House has launched a working group to explore reducing government use of Social Security numbers to verify people's identities following the Equifax Inc breach. The Equifax hack, which compromised the Social Security numbers of 145.5 million Americans has fueled a sense of urgency among administration officials to replace the number with another method. Rob Joyce, the White House cybersecurity coordinator said that Social Security number has outlived its usefulness. The Administration's policy will be based on a standard from the National Insititute of Standards and Technology, a government agency.
Whatever you might think of our current president, you can’t say he doesn’t think big.
The Trump-GOP tax plan just announced has the potential to affect retirement savers in fundamental, long-term ways that could be positive for many Americans. The plan is a long way from reality and is likely to see some changes before becoming law.
For now, here’s the thumbnail version:
• Corporate taxes fall to 20% from the current 35% (and some business deductions end)
• A possible one-time lower rate on repatriated corporate income held abroad, perhaps at 10%
• A 25% rate on “pass-through businesses,” whose owners now pay higher, personal income rates
• Three tax brackets — 12%, 25% and 35% — rather than the current seven
• A near-doubling of the standard deduction, the first dollar of income taxed, to $12,000 per individual and $24,000 for married couples
There’s more, such as a possible refundable child tax credit and the repeal of the estate tax, but let’s focus on what happens to the retirement investor.
If you work and make enough money to save, chances are you save into a 401(k) plan at work or put money into a personal IRA. So far, so good.
If you’re smart, you then invest that money in stocks DJIA, -0.01% and, perhaps, bonds and other securities. After all, you want your cash to grow faster than inflation, and stocks are the way to get that long-term growth.
Now, about taxes. Some will grumble that the corporate rate is low enough, or that the effective taxes paid by companies is low already.
Read: Trump’s tax plan: It’s not great, but it could have been worse
But consider what a corporate tax cut means for retirement savers with investments in the stock market. Sure, lower taxes might mean more jobs. But one thing it means without a doubt is higher corporate income — money that goes to the owners of U.S. corporations.
What to do in your 40s to retire a millionaire
Take a moment to dig into your 401(k) statement or look at it online. Inside your retirement plan you’ll find, most likely, a batch of mutual funds.
Drill down a bit more and you’ll quickly realize that mutual funds are nothing more than giant collections of stocks. One widely held stock mutual fund is the Vanguard Total Stock Market VTI, -0.07%
Among the top holdings of VTI you’ll find Apple AAPL, -0.06% MicrosoftMSFT, +0.04% Facebook FB, +0.58% Amazon AMZN, +0.89% Johnson & JohnsonJNJ, +0.02% Berkshire Hathaway BRK.A, +0.23% BRK.B, +0.17% Exxon MobilXOM, -0.38% and J.P. Morgan Chase JPM, -0.18%
Vanguard fund doesn’t pick these stocks because they are “better” than any others but because the fund tracks the whole stock market from the largest to very smallest companies — 3,582 companies in all.
The top holding, Apple, has a weight of 3% of the total VTI portfolio. What that means is that if you have a $100,000 balance in your retirement plan, you own $3,000 worth of Apple.
Yes, you. People lose sight of this, but owning the stock literally means you own Apple. And Microsoft. And Facebook. An increase in the profitability of the companies in your retirement investment portfolio is an increase in value to you, the shareholder.
Read: Advocates fear Trump’s tax plan may ‘Rothify’ 401(k) plans
The second, crucial point is that retirement savers get to choose their own tax rate. Putting aside money into a 401(k) or IRA directly lowers your taxable income for the year in which you save.
Couple that fact with an increase in the standard deduction and you could see a big decrease in taxes. For instance, if you are married and in the 25% tax bracket, the increase in the standard deduction comes to $2,825 in tax savings.
Treat that money like the raise that is and increase your 401(k) contribution by $109 per paycheck. You won’t miss it, really, and over 30 years that little bit of extra juice could compound into $296,568 for your retirement.
Tax policy is complicated, but the effects of higher corporate profits is not. The benefits accrue to the owners, and that means the millions of Americans who save and invest for their own retirements by owning stock