I liked demand response and energy management company EnerNOC (ENOC) six months ago
and the stock has done well since, rising about 40% as the brutal
winter weather brought attention back to the advantages of electricity
demand response. I still like this company, particularly as the company
shifts its attention to international DR markets and the sizable
opportunities in providing enterprises with tools to better analyze and
manage their energy needs.
The prime issue with EnerNOC remains
the volatile regulatory environment. PJM Interconnection, a major source
of EnerNOC's revenue, is serious about altering its rules for demand
response and those changes threaten a meaningful portion of today's
revenue and cash flow. Over time the company's efforts to diversify and
the underlying advantages of DR should smooth this out, but the
company's reported performance could be erratic in the meantime. That
complicates valuation, though today's price does not seem unreasonable.
Read more here:
EnerNOC Working, But The Outlook Still Cloudy
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