A New Stock I’ve Just Found – Canadian Solar
The world is gradually shifting from coal, nuclear, natural gas, and finally embracing solar power. From statistics, the percentages of these energies are as follows; coal- 24% in 2019 and will be 13% in the year 2050, nuclear energy- 19% in 2019 and 12% in 2050, natural gas- 37% in 2019 and 36% in 2050, renewable energy- 19% in 2019 and will escalate to 38% in the future. This paints a picture telling us that solar energy will be the main source of energy in the future. Welcome to my channel, home of stock investment, finance management, healthy lifestyle, and financial freedom. I am still your host, and today I’ll bring you a topic I’ve recently started exploring.
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Solar energy is radiant heat from the Sun, which is converted into renewable energy. This is done with varieties of technology such as artificial photosynthesis, molten salt power plants, solar thermal energy, photovoltaic, and solar heating. In other words, the light and heat from the Sun are converted to containable energy to supply electricity to our homes, offices, and any other place you can think of. Solar energy is predicted to overtake every other energy source and become the main source of energy for households and industries. Two benefits are that there are no greenhouse gas emissions released into the atmosphere when using solar panels, and the sun produces more energy, which makes solar energy a significant energy source for humanity at this moment.
Renewable energy source: As long as there’s sunlight, solar energy will be available for our everyday uses. Solar energy cannot be exhausted; rather, it is renewed each day.
Reduces Electricity bill: Electricity bills are reduced or not paid at all when solar panels are used, and this helps save money for other purposes.
Diversity: Solar energy can be used in so many ways or purposes; you can generate electricity to reach remote areas.
Low maintenance costs: Solar panels don’t require much attention; when you simply keep them clean, then they will work for a long time.
Canadian Solar, Inc. CSIQ
Canadian Solar Inc. is a producer of solar energy panels worldwide. The stocks of Canadian Solar Inc keep increasing; for example, it was $20 A little while back now it has risen to $30. In addition to this, the GLJ initiated coverage on Canadian Solar Inc and announced a buying rate of $49, making it an attractive stock to invest.
Canadian Solar Inc.’s PE Ratio (TTM) is recorded to be 7.13. There is a lot of appreciation for this stock, which is what investors are looking for. Note that CSIQ doesn’t share dividends and does not have plans to share dividends even in the future. In December 2015, the price for a stock sold at $28, and within five years, it now sells at about $30. CSIQ is now gaining public attention because analysts are throwing more light on the company’s stock, with buyer ratings.
We can also look at the balance sheet of CSIQ, the total current assets are estimated to be $3.1 billion, and a record of estimated liability of 2 billion. This means the company has an asset difference ratio of 1 and a green light for investment. CSIQ also sits on total assets of $ 5billion and a total liability of $3 billion, which gives the total stockholders’ equity of $1.5billion. In addition, the total stockholders’ equity has been appreciating as compared to the previous year’s records. These are elements investors inspect before investing; that is a scenario where the liability decreases faster, and the assets margin increases constantly.
According to the website of Canadian Solar Inc., it set a world record for standard and quality at 23.81% poly cell efficiency on March 6, 2020. Founded in Ontario, Canada, in 2001 and listed on the NASDAQ as CSIQ, the company clearly states its mission as “to power the world with solar energy and create a better and cleaner earth for future generations.” They have an outstanding performance rate of 30% cumulative growth in shipments since 2013, 450 bp average margin premium relative to the industry, $1.4 billion in cash generated cumulatively since 2013, 16% average ROE since 2013, and a global presence in 23 countries.
CSIQ clearly states their MSS (Module and Systems Solutions) as a company that manufactures solar modules and delivers system solutions such as inverters, energy storage solutions, and EPC. CSIQ also clearly states that they are top tier brands among all solar manufacturing companies, to deliver 11-12GW in 2020 and 18-20GW in 2021.
Canadian Solar develops, builds, operates, sells, and owns solar panels across the world. They have 15GW of the project pipeline and 1GW of projects in operation.
CSIQ Market Growth (Short term and Long term); as recorded from their site, they explain the following;
Grid parity: Industry growth is increasingly driven by intrinsic demand and supply, with limited policy overhang from subsidies.
Larger market size: The solar market has reached its critical mass, with annual installations expected at 140GW+.
Lower market concentration: Much lower risk of a global downturn as global demand is no longer dependent on 1-2 markets only. The number of 1GW+ markets has grown from 6 in 2016 to 20 in 2022.
Solar accounts for 3% of global energy generation, expected to grow to 10% by 2030 and 20% by 2050.
This implies cumulative installations will grow from 650 GW to 2500GW by and 8,000GW by 2050.”
The market share of CISQ continues to grow among other top 5 module manufacturers with an appreciating percentage of 14% estimated for 2021.
As part of their business target, they hope to retain minority ownership in certain markets to:
“Capture higher margin income and additional operational value throughout the partial ownership holding period, while recycling a large portion of the capital deployed.
Over time, improve predictability, and reduce future cash flows’ volatility, smoothing the typical lumpiness associated with solar projects’ developments and sale.”
The Canadian Solar Inc. has delivered industry-leading margins over the past few years; the gross margin has appreciated per average by c.450 bp over the past three years (c.300 bp excluding AD/CVD effects)
With total shipments of about 2905 in the 2nd quarter, they generated about 706 million, with a gross profit of 149 million.
Although most investors are sceptical about making a move to buy the stocks because of the solar price depreciating, I see nothing wrong. The more goods and services become cheap, the more money is made due to more patronization.
CSIQ has stood out among other solar manufacturers to make more sales, supplying safer electrical solutions worldwide, and all the projections show massive progress in the previous years.
CSIQ is one of the fastest-growing companies over the next decades and also one of the market leaders. I recommend you invest in CSIQ to boost your stock portfolio, and if you are sceptical, I suggest you make your analysis paralysis.
Benefits of buying the CSIQ stock
From observations, CSIQ is a strong company; therefore, it makes it an excellent enterprise to invest in and add to your portfolio as its profits and growth rise steadily. Also, bear in mind that, if the stock rises in value, and you keep it for a year or two, it will be subject to reduced long term capital gains tax rates, which varies from 0 to 20%.
CSIQ can produce incredible gains, with little risk involved.
I am an investor who likes to diversify my portfolio and look into those underdog companies that no one ever seems to see. I am interested in this Canadian solar stock, and so I have brought a complete breakdown of the company. You should research and find out things about the company for yourself. If you want to be informed of my posts when they are uploaded, then subscribe. You can also leave your comments, and I will give my reply. Don’t forget to like and share.
Recommended for further reading:
- The Intelligent Investor
- The Barefoot Investor: The Only Money Guide You’ll Ever Need
- Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week
- Stock Market Investing For Beginners: The Investment Guide
- A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today