Our first Canadian pick of 2019 has performed quite well. In "First Canadian Pick of 2019 with 100% Upside and Chance to Restart a Profitable Gold Mine", we chose Scorpio Gold Corporation (SRCRF) (SGN.V). SGN has since risen from $0.025 to $0.07 in two months. We are going north of the border once again with Solar Alliance Energy Inc. (SAENF) (SOLR.V). While it has an OTC listing, over 38 million shares traded in Canada on Tuesday and it closed up 150% on news of a deal with Tesla. We think that this stock can more than double from here in short order like SGN has. We are up to 841 followers despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. If you like our picks you can follow our blog by clicking the follow button on the top of the left hand panel. You can also follow us on Twitter @StockTradePicks. We have over 3,700 followers on Twitter as well.
SOLR announced the following deal with Tesla:
Two key items to take away from this news release:
1. SOLR has become a vendor for Tesla with the installation of six charging stations in Nashville.
2. SOLR has expanded to charging stations in general, announcing an expansion from its traditional solar business.
Nashville has 284 charging stations within a 15 kilometer radius of the city with two main networks, Blink and ChargePoint. Filtering by Tesla stations only, there appears to be eight locations within the city of Nashville. So SOLR installing six units is actually quite a significant trial run in the city for Tesla. Assuming it all goes well, we expect that this relationship could be expanded nationwide, starting with SOLR's existing bases in Tennessee, the Carolinas, Kentucky and California.
Attaching itself to a big player like Tesla is gold for a small cap company. This news could make SOLR move huge even beyond what it has already done as it gets disseminated in the wider media over the next few days. If the electric vehicle market is going to take off, demand for residential power will increase. Imagine how that will look during summer time, when grids are already strained from air conditioning. SOLR's one-two punch of being able to install residential charging stations as well as solar solutions will give it an extreme competitive advantage. SOLR has a market cap of $15 million Canadian. For comparison, Blink Charging Co. (BLNK) has a market cap of $75 million. We think based on today's developments, the relationship with Tesla and recent deals in the solar space along with existing operations, a $25 to $50 million US market cap is a reasonable short term target, meaning the stock can go up 2x to 4x from here. Investors are encouraged to do their own research to come to their own conclusions.
The private placement being filled at 3 cents is the most likely reason why the stock hasn't already gone to $0.20. There are only 16.7 million units so the remaining open portion will be filled in short order and people will have to chase shares on the open market. Also, the private placement will be subject to a four month hold. If people want to play the volatility today, they will have to buy on the open market. Trading the stock from 7 cents to 15 cents in a few days is more profitable than buying the private placement at 3 cents and holding for four months, hoping it will stay over 7 cents (though in this case, we think it will).
SOLR released this corporate update a month ago, promising profitability among multiple lines of business in the solar industry:
*2.4 MW of work in process projects were substantially completed by year end, 2018 and will reach final completion in Q1, 2019.
Corporate Outlook. According to the latest Renewable Energy Industry Outlook from Deloitte, the fundamental drivers of solar industry growth are poised to continue in 2019, supported by three trends coming into sharper focus that are likely to shape renewable growth in the coming year. Those trends include emerging policies that support renewable growth, expanding investor interest in the sector, and advancing technologies that boost solar energy’s value to the grid, asset owners, and customers. The Deloitte report notes that increasing customer demand for renewable energy across almost all market segments continues to expand opportunities. While the current US administration is not focused on decarbonization, states, cities, communities, and businesses with increasingly ambitious sustainability goals are driving renewable growth.
2019 got off to a reasonable start for microcap stocks as the market in general was bullish for the month. There were a lot of stocks that spiked 100-500% in a matter of one or a few days. As we look towards the rest of 2019, we have to figure out what's next for microcap stocks? TradeMiner identifies seasonal trends and market cycles, the Penny Stock Prophet and Microcap Millionaires finds the next big small cap plays in various industries while Addicted to Profits makes trades from a Canadian perspective.
There are also some good books available on microcap stocks and day trading such as:
Mastering Microcaps: Strategies, Trends, and Stock Selection (Bloomberg Professional Library)
The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks
Microcap Magic: Why The Biggest Returns Are In Stocks You've Never Heard Of
How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology
How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology
A Beginner's Guide to Day Trading Online (2nd edition)
Stock Investing for Beginners: Marijuana Stocks
Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:
The dividend stock report from dividendstocksonline.com
SOLR announced the following deal with Tesla:
"Solar Alliance Becomes Tesla Approved Vendor
Electric Vehicle Charging Solution is the Perfect Match for SunBox Home Solar System
VANCOUVER, BC, and KNOXVILLE, TN / ACCESSWIRE / March 26, 2019 / Solar Alliance Energy Inc. (‘Solar Alliance' or the ‘Company') (TSX-V: SOLR) is pleased to announce that the Company is now an approved Tesla vendor and has signed an agreement to install six Tesla charging stations combined with a solar system at a commercial project in Nashville, Tennessee.
"Becoming a Tesla approved vendor provides Solar Alliance customers with the opportunity to access a high-quality electric vehicle charging station installation," said Solar Alliance CEO Myke Clark. "We now have the ability to install standalone Tesla charging stations for homeowners, but more importantly, we can integrate Tesla electric vehicle chargers into our residential and commercial solar system products. Offering Tesla charging stations is particularly important to our new home builder and contractor clients that are constructing high performance homes. As electric vehicles begin to saturate the market, electric vehicle chargers are becoming increasingly critical to the relevance of a new home and ultimately to the resale value of a home," concluded Clark.
The project in Nashville, where we are installing a solar system and six Tesla charging stations, is the perfect example of the synergies between solar and electric vehicle charging. According to the latest International Energy Agency forecast, the number of sales of electric vehicles will increase from a record 1.1 million worldwide in 2017, to 11 million in 2025 and then surging to 30 million in 2030 as they become cheaper to make than internal combustion engine cars. The Volkswagen Group is going to shift its fleet to 100% electric by 2030. This massive shift to electric vehicles will require a substantial shift in terms of electrical demand and drive the further adoption of residential and commercial solar.
Solar Alliance is a fully licensed general contractor staffed by North American Board of Certified Energy Practitioners (NABCEP) engineers and installers. Our team is licensed to complete a broad range of electrical work and the addition of Tesla products to our list of offerings provides our customers with a quality product installed by a team they can trust. The Tesla electric vehicle charging station is now an option that can be included in the Solar Alliance SunBox residential solar product. SunBox is a complete solar solution that includes battery storage to maximize energy savings and provide an added layer of security for high performance homes. SunBox comes in two standard residential systems sizes with options such as a generator for whole home backup and a home electric vehicle charger.
Solar Alliance is a fully licensed general contractor staffed by North American Board of Certified Energy Practitioners (NABCEP) engineers and installers. Our team is licensed to complete a broad range of electrical work and the addition of Tesla products to our list of offerings provides our customers with a quality product installed by a team they can trust. The Tesla electric vehicle charging station is now an option that can be included in the Solar Alliance SunBox residential solar product. SunBox is a complete solar solution that includes battery storage to maximize energy savings and provide an added layer of security for high performance homes. SunBox comes in two standard residential systems sizes with options such as a generator for whole home backup and a home electric vehicle charger.
The Company also announces that the balance of the private placement announced on February 11th, 2019, is proceeding having been granted a 30-day extension by the TSX Venture Exchange."
1. SOLR has become a vendor for Tesla with the installation of six charging stations in Nashville.
2. SOLR has expanded to charging stations in general, announcing an expansion from its traditional solar business.
Nashville has 284 charging stations within a 15 kilometer radius of the city with two main networks, Blink and ChargePoint. Filtering by Tesla stations only, there appears to be eight locations within the city of Nashville. So SOLR installing six units is actually quite a significant trial run in the city for Tesla. Assuming it all goes well, we expect that this relationship could be expanded nationwide, starting with SOLR's existing bases in Tennessee, the Carolinas, Kentucky and California.
Attaching itself to a big player like Tesla is gold for a small cap company. This news could make SOLR move huge even beyond what it has already done as it gets disseminated in the wider media over the next few days. If the electric vehicle market is going to take off, demand for residential power will increase. Imagine how that will look during summer time, when grids are already strained from air conditioning. SOLR's one-two punch of being able to install residential charging stations as well as solar solutions will give it an extreme competitive advantage. SOLR has a market cap of $15 million Canadian. For comparison, Blink Charging Co. (BLNK) has a market cap of $75 million. We think based on today's developments, the relationship with Tesla and recent deals in the solar space along with existing operations, a $25 to $50 million US market cap is a reasonable short term target, meaning the stock can go up 2x to 4x from here. Investors are encouraged to do their own research to come to their own conclusions.
The private placement being filled at 3 cents is the most likely reason why the stock hasn't already gone to $0.20. There are only 16.7 million units so the remaining open portion will be filled in short order and people will have to chase shares on the open market. Also, the private placement will be subject to a four month hold. If people want to play the volatility today, they will have to buy on the open market. Trading the stock from 7 cents to 15 cents in a few days is more profitable than buying the private placement at 3 cents and holding for four months, hoping it will stay over 7 cents (though in this case, we think it will).
SOLR released this corporate update a month ago, promising profitability among multiple lines of business in the solar industry:
"Vancouver, Canada, and Knoxville, Tennessee, February 21th, 2019 – Solar Alliance Energy Inc. (‘Solar Alliance’) or (the ‘Company’) (TSX-V: SOLR) is pleased to announce the promotion of Myke Clark to the position of President and Chief Executive Officer, effective immediately. Mr. Clark has also been appointed to the Company’s board of directors and has been with the Company as its Chief Operating Officer since 2015. Jason Bak will continue as non-executive Chair and as a director, along with Anton Shihoff and Ken Stadlin. David Lamont has resigned from the board to pursue other opportunities. The Company thanks Mr. Lamont for his years of support, service, diligence and strategic guidance as it developed over $1 billion of renewable assets that are currently operational.
“As a Founder & CEO of this Company it has been my great honour to work alongside numerous professionals as we have developed a number of world class renewable assets. In the last few years we have progressed from seeing returns from development to a focus on growth of revenue and importantly profit. The appointment of Mr. Clark is the outcome of an orderly succession process that has a key goal – profitability. I look forward to supporting Mr. Clark from my role as Chairman,” states Bak.
Mr. Clark has more than 20 years of experience in media, public affairs, marketing and operations with a variety of public and private companies, most recently as the Chief Operating Officer of Solar Alliance. Prior to joining Solar Alliance in 2015, Mr. Clark was a senior public affairs, branding and strategic communications consultant in the natural resource sector, SVP Business Development for Finavera Wind Energy and a journalist with the Canadian Broadcasting Corporation. Mr. Clark holds an MBA from Simon Fraser University.
“I am excited to be taking on the role of CEO at Solar Alliance and look forward to working with our exceptional team of renewable energy professionals to create a stable, profitable business that generates strong returns for shareholders,” said Mr. Clark. “We have a strong team that has developed a growing pipeline of commercial solar projects along with an exciting new residential solar product – SunBox – that has the potential to transform the solar industry. I am looking forward to growing Solar Alliance and building on the work done to date. I also look forward to enhancing our investor relations program to ensure our operational successes are recognized in the capital markets,” concluded Clark.
Corporate Update
The Company has seen significant change in its shareholder base over the last year with a high net worth shareholder acquiring over 50% of the Company’s stock. This shareholder has taken a position in the Company to support significant growth via the execution of a clearly defined plan.
The Company’s plans for 2019 will build on the substantial ground work laid in 2018. In 2018, we experienced a ten-fold increase in commercial solar installations over the previous year and entered into agreements with a Fortune Global 500 company in the southeast US and a large property developer in California. These agreements total almost 3 megawatts (“MW”) of solar projects and set the stage for future large-scale projects. We have also enhanced our sales process for targeting small to mid-sized commercial projects. Finally, we launched “SunBox”, a new product offering that provides a simple, efficient solar system specifically designed for architects, new home builders and their customers. These three business units – large scale commercial, mid-sized commercial and SunBox – form the basis of Solar Alliance’s long-term strategy. Each has a different revenue and growth profile that, when combined, have the potential to deliver significant long-term value for Solar Alliance shareholders.
The goal of Solar Alliance has always been simple: create a better world through the adoption of renewable energy technologies that allow individuals and businesses to take control of their electricity use. Invest in your home or business while being part of the climate change solution. The path from vision to implementation and profitability, however, is rarely a straight line. While the overall solar industry is growing, that growth has often come at the expense of profitability for many companies. The key is determining where the value lies and how to take advantage as a company. And do it all at scale while maintaining profitability. We see long term, sustained growth occurring in the commercial solar market and the new home residential solar market. And that’s why our resources are focused on those areas.
Large scale commercial. During 2018 we signed two large scale commercial projects: a 2.4 MW project for a Fortune Global 500 company in the Southeast U.S and 518 kW project in Los Angeles for the Onni Group, a large property developer. The 2.4 MW project is nearing completion. For commercial reasons, the identity of the Fortune Global 500 customer is not being released until the project’s completion, but our goal is to leverage this project across a large portfolio of facilities owned by the client. The Los Angeles project is expected to begin construction this month. These larger projects can drive significant revenue for the Company and we are targeting the signing of 2-3 new large-scale projects in 2019. The sales cycle for these projects is long, so it is also important to focus on mid-sized projects that deliver faster revenue.
Mid-sized commercial. Our team completed the installation of several commercial solar projects ranging in size from 30 kW to 150 kW. Permitting, financing and construction of these mid-sized projects is simpler than with large-scale projects, allowing for faster cycle times and more consistent cashflow. Our goal is to enhance our sales team in an effort to target a 50% increase in project sales in this business line. The combination of large-scale and mid-sized commercial solar projects has contributed to a record ten-fold year over year increase in Solar Alliance’s pipeline of commercial solar projects.
| Commercial Solar Installations | |||
| Year | Installed (kW) | Work in Process (kW) | Total (kW) |
| 2017 | 387 | – | 387 |
| 2018 | 289 | 3,134* | 3,423 (3.4 MW) |
*2.4 MW of work in process projects were substantially completed by year end, 2018 and will reach final completion in Q1, 2019.
SunBox. The traditional sales model of utilizing door to door canvass teams to generate leads for individual solar system sales is an expensive way to do business and for many solar companies it doesn’t make economic sense. The residential solar industry is inundated with outdated sales techniques that drive customers away instead of bringing them on board. That’s why we decided to invest the time and resources in developing a new model that we believe will drive residential solar in the coming years. Over the last year we have developed a comprehensive product offering called SunBox that has the potential to revolutionize the residential solar sales model. Solar Alliance is selectively partnering with architects, developers and homebuilders that will integrate this solar offering into their existing home designs for new construction, with the primary customer base consisting of developers building large, multi-home communities. It took time to develop the SunBox business plan, product components and finalize supply chain logistics. In the long run, we believe this investment of time and resources will reap significant benefits.
Solar Alliance will initially offer SunBox in Tennessee, followed by entry into the North Carolina, South Carolina, Georgia, Kentucky and California markets. The addressable market is significant, and California has already mandated all new homes are required to have solar starting in 2020. The table below outlines the number of new single-family home permits applied for in each of these states, representing a rough estimate of the potential market Solar Alliance is targeting. It also illustrates the potential revenue available if 1% of the addressable market was captured.
| State | New Home Permits (2017) | Potential revenue from 1% of Addressable Market |
| Tennessee | 27,119 | $6,779,750 |
| North Carolina | 49,366 | $12,341,500 |
| South Carolina | 28,851 | $7,212,750 |
| Georgia | 40,311 | $10,077,750 |
| Kentucky | 7,967 | $1,991,750 |
| California | 57,132 | $14,283,000 |
| Total 2017 New Home Permits | 210,746 | $52,686,500 |
Corporate Outlook. According to the latest Renewable Energy Industry Outlook from Deloitte, the fundamental drivers of solar industry growth are poised to continue in 2019, supported by three trends coming into sharper focus that are likely to shape renewable growth in the coming year. Those trends include emerging policies that support renewable growth, expanding investor interest in the sector, and advancing technologies that boost solar energy’s value to the grid, asset owners, and customers. The Deloitte report notes that increasing customer demand for renewable energy across almost all market segments continues to expand opportunities. While the current US administration is not focused on decarbonization, states, cities, communities, and businesses with increasingly ambitious sustainability goals are driving renewable growth.
The solar industry remains strong. But for Solar Alliance shareholders, how does that translate into shareholder value? The Company had operational success in 2018, but our share price hasn’t kept pace with that operational success. Our goal is to increase our visibility in the coming year to ensure the market is aware of the progress we’ve made and the exciting developments still to come. More importantly, we believe the fundamental improvements we’ve made to our business will increase shareholder value. Those improvements have resulted in us setting the following goals for 2019:
- Sign 2-3 large scale commercial projects.
- Increase our commercial sales team to realize a 50% increase in sales of small- to mid-sized commercial solar projects.
- Fully launched SunBox in the following markets: Tennessee, North Carolina, South Carolina, Georgia and Kentucky.
Achieving these goals in 2019 would result in a material increase in revenue. Long term, we are also pursuing options for Solar Alliance ownership of solar systems to ensure recurring revenue. The marketplace has seen the issuance of green bonds to support company ownership and that is an option is we are looking closely at. Extracting the full value from solar system sales, including ownership and recurring revenue, are goals Solar Alliance is committed to.
Solar Alliance sees long term, sustained growth occurring in the commercial solar market and the new home residential solar market. The Company has focused its resources on three business units: large scale commercial, mid-sized commercial and SunBox. It’s been a challenging journey to reach this point but we are now in a position for sustainable success.
Myke Clark, CEO"
Disclosure: We are long SOLR.V2019 got off to a reasonable start for microcap stocks as the market in general was bullish for the month. There were a lot of stocks that spiked 100-500% in a matter of one or a few days. As we look towards the rest of 2019, we have to figure out what's next for microcap stocks? TradeMiner identifies seasonal trends and market cycles, the Penny Stock Prophet and Microcap Millionaires finds the next big small cap plays in various industries while Addicted to Profits makes trades from a Canadian perspective.
There are also some good books available on microcap stocks and day trading such as:
Mastering Microcaps: Strategies, Trends, and Stock Selection (Bloomberg Professional Library)
The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks
Microcap Magic: Why The Biggest Returns Are In Stocks You've Never Heard Of
How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology
How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology
A Beginner's Guide to Day Trading Online (2nd edition)
Stock Investing for Beginners: Marijuana Stocks
Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:
The dividend stock report from dividendstocksonline.com
The dividend stock report from Dividend Stocks Rock
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
And try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
And try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
For those who are interested in trading bitcoin and other cryptocurrencies, here are some links to valuable reports and strategies:
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