With the S&P 500 poised to open lower, shares of solar microinverter-maker Enphase Energy (NASDAQ:ENPH) quickly plunged into the red Thursday morning. But then a miracle happened -- Enphase shares turned around, and pared their loss to just 2.7% in afternoon trading (12:55 p.m. EDT).
Why the drop, and why the reversal? Chances are the initial decline can be chalked up simply to investors "taking profits" after a strong five-day, 20% run.
The June 17 short report from Prescience Point Capital Management targeting Enphase sparked a chorus of endorsements for the stock on Wall Street. And in response to those endorsements, investors flocked back to buy shares of Enphase. Yesterday's sell-off on the Nasdaq may have spooked momentum traders, however, and prepared them to exit Enphase stock this morning.
And yet, investor panic was short-lived. By noon Thursday, investor attention was already turning to new news -- to wit, Enphase's announcement this morning that it is teaming up with Hanwha Q Cells (NASDAQ:HQCL) in Germany to build a new kind of solar module.
Dubbed the Enphase Energized Q CELLS AC Module, this new solar power unit will be "based on seventh-generation Enphase IQ microinverters" and is said to be about 19.5% efficient in converting sunlight into usable electricity. (According to tech authorities, average efficiency among most solar panels on the market today ranges from 15% to 17% ).
In addition to superior efficiency, the new product is said to guarantee "85% [of] initial performance in the 25th year" of use -- and will be backed by a "25-year module warranty" to boot, virtually ensuring that most solar users will recover their installation cost.
Good news for Enphase? I think so -- and the market seems to be coming around to that same conclusion.