Real industry trends don’t spontaneously occur. They’re forged on the ground by what companies are actually doing. And you spot them by focusing on individual companies’ results, and aggregating your findings.
Take roof top solar panels, which many believe will cause the downfall of electric utilities. A recent post in Renewable Energy World.Com went so far as to compare developer SolarCity (NSDQ: SCTY) with Amazon (NSDQ: AMZN). The obvious analogy: A new era of “distributed” energy is on the verge of displacing power companies the way Amazon did traditional retailers.
To be sure, SolarCity is a hot stock, up 362 percent year-to-date. But despite a strong quarter for sales, it’s still a long way from turning a profit. And without continued favorable access to capital markets and government subsidies, it would have a tough time surviving.
That’s why there’s massive short interest against the stock, equal to 23.8 percent of total float. But the real reason to doubt a solar panel-triggered utility apocalypse lies in third quarter results of companies I track in the Utility Report Card.
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