After only a year on the job, John Flannery is out. The former chairman and CEO of General Electric was removed on Monday, October 1, 2018, as a result of the board’s dissatisfaction with “the execution that was taking place under John Flannery’s leadership,” CNBC’s Andrew Sorkin said on “Squawk Box,” citing sources. According to CNBC, Flanner’s removal was largely driven by the “slow pace of change” under Flannery, and not driven by the power business woes,” which many would infer was the reasoning. Early last week, GE’s shares had fallen to a nine-year low last week, trading at $11.27 per share.
Flannery was appointed as CEO in August of 2017, taking over for Jeff Immelt. Regardless of this leadership change, GE’s value continued to depreciate, setting record lows as investors were “unconvinced by Flannery’s turnaround plan.” While Flannery made countless efforts to shift the tide that was driving the industry conglomerate onto shore into rocky waters, these attempts failed.
Perhaps the largest blip on Flannery’s career as CEO took place several weeks ago on Thursday, September 20, 2018, when GE Power Chief Executive Russell Stokes shared, in a letter posted on LinkedIn, thattherer were multiple issues with its newest line of natural gas-fired power turbines. Stokes explained the issues found with the “HA turbines” in a blog titled, “Making the Best Turbines is Hard Enough. At GE, We Never Stop Making Them Better.”
“More recently, we identified an issue that we expect to impact our HA units. It involves an oxidation issue that affects the lifespan of a single blade component”
- Russell Stokes, President and CEO of General Electric Power
Stokes post is less about giving excuses for failed attempts at revolutionizing power generation and more so about leveling with consumers and stakeholders. He begins his post by saying that GE power came to life with two key notions, the first of which being “innovation is hard, but it is the lifeblood of what we do. One rarely arrives a significant breakthrough without taking on seemingly insurmountable obstacles that might make others give up.” I applaud his efforts, not because he is trying to strengthen his arguments for his department’s failures, but because he is trying to connect with his readers, and moreover because Stokes humanizes General Electric. To err is human, but rarely do we associate corporations with humanism. If anything, perhaps this softened the blow, or at least, allowed Stokes to still have a position at GE Power.
“One rarely arrives a significant breakthrough without taking on seemingly insurmountable obstacles that might make others give up”
John Flannery’s fate was not as bright. While this incident relating the HA turbines occurred during John Flannery’s holding of the CEO position, according to CNBC’s Andrew Sorkin, his removal “was not driven by the turbine issue.”
Following his removal, GE installed former Danaher CEO Lawrence Culp as his successor. After GE made this announcement on Monday, October 1,2017, GE shares shot up 13 percent in trading.
According to the Wall Street Journal, “Mr. Culp is expected to continue with the strategy to spin off GE’s health-care business and sell two other big units, these people said, leaving the company focused on its power and aviation units.” Lawrence Culp is the first person, not hired from within the company, to run GE. The company is known for its extensive history of homegrown executive leadership. Former CEOs Jack Welch and Jeff Immelt both served for over fifteen years each.
Culp comes to General Electric after serving as CEO of Danaher from 2001 until 2015, having led the company through multiple acquisitions. During his time as CEO, “total shareholder return was 465 percent.” He joined the GE board in April and has spent time cultivating relationships with other board members.
The Wall Street Journal reports that the CEO spent his first day on the job “ in the company’s Boston headquarters, calling investors” and getting settled.
Enphase Energy (ENPH) Is The Stock Of The Year: Is It Time To Sell?
Enphase Energy Inc. (ENPH Stock Report) is poised for a promising future since it provides basic technology in the development of a final product in the solar panel industry. With the energy industry shifting into renewable energy there is much potential to leverage.
Therefore investors should be keen on Enphase stock because of the potential presented but they have to consider the following factors before making a decision to buy:
Enphase Stock Price Skyrockets On Big Catalysts
The company produces micro-inverters which are very crucial in the solar panel industry. There is huge potential in the market and according to the US Energy Information Administration, the solar industry is expected to grow by around 50% by 2050 and lead the rest of renewable energy sources.
After hitting a wall in 2016 because of operational discipline and lack of finances the company has turned a leaf by having a new CEO as well as reviewing the production and sales strategy. It had a strong 2018 with revenue increasing by 10% and adjusted earnings of $0.10 per share. The trend continued to 2019 and the company saw a 100% growth in adjusted earnings in Q1.
Performance of Enphase Stock Price
Enphase’s stock price has been performing well. So far it’s up over 460% since the beginning of this year. For investors, they have to assess the risk-reward balance of the stock. Also the possibility of Wall Street getting ahead of itself.
In terms of valuation, you can’t use price-to-earnings as your guide. That’s because the company has been profitable. This leaves them not so promising price-to-sales as a valuation metric.
Enphase Energy might have turned a new leaf. It’s expected to have a strong 2019 if the performance in Q1 is anything to go by. However, ENPH stock is already showing overbought technical indicators.
This, of course may be worrying considering this upturn happened in a short span. There is so much hype regarding the stock without focusing on underling numbers. As an investor, would you rather sit and watch the stock or jump in at all time highs? The choice is yours.
Oil Stock Prices Soar: Is Crude Oil Back In The Bull Trend
On Tuesday, the prices of some of the better known offshore oil drilling stocks soared and some of the stocks managed to gain as much as 10%. Some of the biggest gainers in the sector included Transocean, Diamond Offshore Drilling (DO Stock Report), Transocean Ltd (RIG Stock Report) and Noble Corporation (NE Stock Report).
There are some factors which are responsible for the rise in these stocks. One of those is the improved outlook among investors about the economy, while the other factor is related to Transocean’s financial results, which managed to beat analysts’ estimates comfortably.
Oil Prices Jump 2%
The rise in oil prices usual has a big effect on offshore oil drilling stocks. On Tuesday, the price of oil rose by a hefty 2%. Oil traders across the world now have a positive outlook about oil prices since the Federal Reserve cut rates. That is almost certainly going to turbocharge economic activities.
Consequently, oil demand is going to rise and the price of oil could rise further. Oil producers are going to spend more on drilling activities on the back of better margins. With higher demand, it’s only natural that offshore drilling companies’ shares have gone up.
Major Trigger For A True Bull Market?
On the other hand, the better than expected results posted by Transocean also proved to be a major trigger. Analysts believe that the company could do even better in the upcoming quarters. That has created optimism about the wider offshore drilling industry.
Analysts now believe good times might be approaching for some of the main offshore oil drilling companies. This could result from the rate cut by the Federal Reserve and the expected rise in oil prices, . However, oil prices can be extremely fickle. Therefore many other factors could end up affecting prices negatively.
Solar Energy Stock Prices See Brighter Future
The future for solar energy plants and industry looks bright (no pun intended). Even after the government’s inclination towards fossil fuels and the high tariff rates levied, Q1 of 2019 saw a 10% rise in the installation digits to 2,674 megawatts of Solar.
A report- Solar Market Insight Report 2019 Q2 – was published by SEIA and Wood Mackenzie Power & Renewables. It shows how solar power has set a record for itself, strengthening the residential and utility-scale projects. States have been actively installing solar; take, for instance, Florida, which installed the biggest percentage of solar in Q1.
NextEra Energy (NEE – Stock Info)’s subsidiary, Florida Power and Light was one of the major reasons for this high installation rate. This happened after the announcement of procurement of 1,500 MW of solar. The company plans to expand this installation number to 10,000 MW by 2030. This implies a new market development possibility.
The Increasing Sales Figure Might Set Another Record
On the other hand, California used to lead for solar installations, but it reported a 538 MW installation figure in Q1. While in 2017 and 2018, California had accounted for 2,599 MW and 3,396 MW solar installations respectively, Florida had installed a total of 758 MW in 2017 and 857 MW in 2018.
Thus, the sudden boost in the Floridian install came as a pleasant surprise but the residential and commercial solar is yet to show such progress in Florida. With the solar leasing being pushed to next year and the push back on net metering by utilities, Florida still has a long way to go.
Residential solar installation alone rose by 6% as compared to the previous years’ figures. A total of 603 MW of solar was installed in Q1. This helped companies like Sunrun (RUN – Stock Info) and Vivint Solar (VSLR – Stock Info) make it through its difficult conditions. Utility Solar, on the other hand, with installation count of 1,633 MW, is also skyrocketing.
Florida seems to have been a significant contributor to this figure. The boom in utility-solar has changed the projected installations for the state. This went from 6,000 MW to 9,000 MW expected over the next five years. Meanwhile, nationwide the forecasted figure increased by 1,200 MW in 2019.
What Does The Future Hold?
The sales and marketing cost have been high and been one of the major roadblocks in the industry’s growth. The commercial solar, however, remains a major concern. With the policy changes in California, Minnesota, and Massachusetts affecting the industry, the installation of solar decreased by 18%. This total was only 438 MW.
The increased demand for solar is a benefit for the companies. Solar-panel provider giants like First Solar (FSLR – Stock Info) and SunPower (SPWR – Stock Info) could greatly benefit. The companies look forward to an enthusiastic surge in demand. Even companies like Sunrun, Vivint Solar and SunPower have gained with the growing volumes of residential installing solar.
After two hard years of policy headwinds, this came as a hopeful rescue for the companies. The higher volumes promise a better future for the stocks of the companies.
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