EnSync, Inc. – ESNC (Watchlist?)

The prospect of solar power, a renewable resource for the next 4 or 5 billion years as long as there are humans left to use it, is an industry that is projected to triple in size over the next few years. This is according to the SEIA or Solar Energy Industries Association. This anticipated growth presents a great opportunity to find a well-managed and established company that can capitalize on this trend. Which brings me to EnSync Energy Systems (symbol ESNC). The small cap ESNC is one of many companies driven to enable its customers to harness┬ásolar energy, manage it, and distribute their excess collection of power into the power grid. The company describes itself as “a leading developer of innovative distributed energy resource (DER) systems and Internet of Energy (IoE) control platforms for the utility, commercial, industrial and multi-tenant building markets.”

One of the many things that has brought me to this company, like my other picks, is its technological potential. Tech that’s integrated with its products and is considered at the forefront in the industry. So much so that it has caught the interest of the much larger Schneider Electric. The company recently announced a collaboration agreement with Schneider to explore DER market opportunities. It will certainly be interesting to hear the full details or potential outcome of this agreement.

I have not started a position in EnSync, Inc., but am certainly keeping it on my watchlist. According to the latest quarterly report, they have cash on hand of $12.4 million, however the recent cash raise suggests it was not enough to support the financing of the new recent projects. Selling shares may be the option of choice for the company further depressing value which leads me to a sit and wait approach. Looking at the possible growth trajectory, factoring in the recent power purchase agreements (PPA’s), the partnership with Schneider Electric, and general growth of solar markets, I expect to see an increase of more than 100% in share price over the next couple years. Timing here is key. More details to come…

DryShips, Inc. – DRYS (Warning)

Dryships, Inc. is a company that would not make it onto my radar, but I wanted to share with you the incredible disaster that has enveloped the poor shareholders of this company and why research/education is always IMPORTANT. There are some good companies that may go through rough patches in share price and then there are bad companies, period.

DRYS, within the last couple of years, has gone through around 7 reverse stock splits! Just completed the last split today. Crazy! Market education explains that reverse stock splits, for the most part, are BAD news. In the case of DRYS, it’s a legal way for the company to cover up the severe stock dilution that’s occurring from the company selling shares, which explains the established downtrend in price.

If you’re considering this stock, I must do my part in warning you to STOP IT!! To those who managed to escape, congrats. It’s got to be brutal for those caught in its jaws while also hilarious to see the near 99% loss of share price value. Reading the severe rage and anger spewing from ‘bag-holders’ on media sites can be a comical getaway. I encourage you to watch this vessel sink from the safety of my other growth stocks and take some lessons in witnessing poor company management!

 

*July 20 Update*

Reverse split number 8 or so, is being enacted. This 7:1 stock split is again the companies latest attempt to keep their share price above $1 dollar to remain on the Nasdaq market. I expect dilution to continue. Be warned, STAY AWAY!