After much deliberation, I have decided it is time to book a loss on Sunrun (RUN).
The position has been a big disappointment from the get-go. Shares are down more than 40% since we entered the initial trade a little over a year ago.
This is not entirely surprising given 2022’s bear market and investors’ aversion to growth stocks. However, the sector has been unable to hang onto much of the gains it made this summer following the passage of the Inflation Reduction Act, which is seen as being a big boon for the industry.
As you know, I believe concerns about higher interest rates suppressing demand for solar panel installations are overblown. Sunrun’s latest quarterly results back this view and showed the company was able to increase the rates it charges customers to more than offset its costs.
Yet, in the face of strong quarterly results and governmental support for the sector, RUN continues to struggle. Now that shares have broken back below $30, I am concerned about a further sell-off, especially if we get a negative surprise from the Federal Reserve next week.
Therefore, I am recommending we book a loss on the position and put our capital to better use elsewhere.
If you decide to stick with RUN, please do not hesitate to email me with questions.
Current Stock Price: $28.88
Cost Basis: $42.01
- Buy to close the RUN Dec Monthly (12/16) 35 Call for around $0.13, but adjust as needed to close today
- Sell shares at market
Loss: $13.26, or $1,326 per 100 shares