What’s this “Dark Burst” Business from Michael Robinson?

What's being hinted at in the latest Radical Technology Profits teaser ads?

By Travis Johnson, Stock Gumshoe, February 18, 2020


This teaser solution was first published on December 9, when the ad was promising a dramatic surge on January 1. The stock has climbed quite a bit, and the latest urgent teaser pitch is that the company will announce something dramatic on February 18. That is the day they will announce earnings, after the market close, and expectations are high after a dramatic spike in the share price. What follows has not been updated or revised since we first published this teaser on December 9.

Soooo many questions about this latest teaser pitch from the Money Map folks! And have no fear, the Thinkolator is on the case and we’ll get you some answers about this “Dark Burst” stuff.

So what’s the idea? Well, this is the beginning of the ad…

“Stunning Government Mandate Goes into Effect Midnight December 31, 2019, Unleashing…

“DARK BURST”

“This Life-Changing Technology Is Projected to Generate $153 Billion… And Hand a 10,285% Sales Surge to One Tiny Company.”

This is all about a new part of the building code in California that has been in the works for a couple years, a new requirement that all new homes built in the state must have solar panels starting on January 1, 2020. This is not a surprise or an unknown development, though it was fought over in court for a while.

The ad is for Michael Robinson’s Radical Technology Profits, which is currently being sold for $1,450 a year (no refunds), and he promises to reveal that secret “Dark Burst” stock just as soon as you send in your $1,450.

We are not, naturally, crazy enough to throw that kind of money after a “hot tip” idea, particularly if we don’t know whether we’re interested in that kind of high-priced technology newsletter in the long term, so let’s put the Thinkolator to work, ID the stock for you, then you can think for yourself about both the investment and the newsletter subscription.

The promise, naturally, is that this big move in California will benefit “one small stock” — here’s a little more from the ad…

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“… even though most solar companies are going to benefit…

“If you really want a chance to get rich…

“And I mean seven figures rich…

“Then you’re going to want to go ‘all-in’ on one tiny company that’s perfectly positioned in the heart of California.

“The moment that the new solar law goes live, this company’s breathtaking achievement will likely become mainstream news…

“Sending the company’s revenue potential skyrocketing practically overnight.”

So what does this “Dark Burst” company do?

“You see, they’ve invented a revolutionary scientific breakthrough…

“One that’s specifically designed to remove the one roadblock that’s kept solar power chained to the sidelines for decades.

“For the First Time Ever, Solar Can Now Work Virtually around the Clock.

“No longer is this radical form of energy just tied to the daytime.”

What? Solar power with no sun? That’s what he’s saying…

“Instead of squeezing out juice for only a few hours per day, this game-changing breakthrough will allow any solar energy system to work day and night…

“From before the sun has risen above the horizon…

“To long after the sun has set…

“With any kind of light – even moonlight.”

OK, so unless we’re talking “batteries,” that sounds like hooey. More info?

He pulls in some quotes from other sources, aiming to make this seem more real…

“That’s why academic news authority Science X declared this kind of breakthrough an…

‘Energy Game Changer’

“And why Bloomberg has labelled the technology behind this achievement…

‘Crucial to Making Solar Power Work'”

And as we see so often with these kind of whiz-bang technology teasers, Robinson actually holds up the mysterious “Dark Burst” device, talks about how many huge companies are already buying it, and provides some more detail….

“It measures just 8.3 inches tall by 6.8 inches wide…

“And weighs just 2.3 pounds.

“And this radical technology has taken some of the brightest scientists the world has ever seen – from Stanford, MIT, and USC – more than 40 years…

“Thousands upon thousands of hours of research and testing…

“And millions of dollars in funding to create.”

It’s also not new, it’s already being sold — he just thinks they’ll sell a lot more of them. He mentions some big deals they have with customers:

“18 out of 20 of California’s largest homebuilders – including D.R. Horton and Pulte Homes – inked partnership deals to secure their supply of this incredible technology.

“That’s why starting at midnight on December 31, my projections show that…

“43.3 Million Dark Burst Devices Will Begin Distribution across the State…

“Sparking the Potential for a Staggering $32.5 Billion Windfall.”

California is very under-housed compared to most states, despite the fact that they’ve been trying to spur more homebuilding, but it’s also a huge state so there’s definitely always a strong level of construction going on… though 43 million devices sounds like a massive number for a state that sees about 80,000 homes built every year.

And we get some clues that should help the Thinkolator…

“Right now, this little company generates $316 million in sales per year.

“Even in the solar industry, that’s a microscopic amount of revenue for a firm with such important technology.

“But with December 31 just over the horizon…

“This Company Could See $32.5 Billion in New Revenue for Their Dark Burst Devices over the Coming Years.

“Handing Them the Potential to Score a 10,285% Sales Surge!”

So it sounds like he’s probably talking up one of the inverter companies, which in the US would mostly mean SolarEdge (SEDG) or Enphase (ENPH), both of which have done spectacularly well this year (partly because they’re among the quieter beneficiaries of the war against Huawei — Huawei is one of the larger inverter makers in the world, but doesn’t really play in the US market for political reasons). Bloomberg had a good article about these guys a few months ago.

And since Michael Robinson held up one of these “Dark Burst” devices during his “presentation,” I can also tell you that it looks exactly like an Enphase microinverter… and Enphase did indeed have $316 million in revenue last year, though that number has already been skyrocketing higher in 2019 as demand has soared for their products (the trailing twelve month revenue number is up over $500 million now). So that’s our confirmation of the Thinkolator’s answer, this is Enphase Energy (ENPH).

This has been an incredible stock, to be sure — it was down in the dumps, priced at a dollar or two in 2017, and peaked at near $35 just in August… it’s back around $24 now, so what to do?

Well, you probably shouldn’t count on my expertise… since I looked at Enphase when it was a busted IPO in 2016, getting teased by a Casey newsletter, and decided I wasn’t all that interested in what was, at the time, a clobbered microcap priced at a dollar or two (in my defense, the other solar power equipment stock being teased in that older spiel was Ideal Power (IPWR), which went from about $50 to $2).

Now, of course, Enphase looks a lot more solid — it has a good and rapidly growing revenue base, it’s valued at about $3 billion (it was under $100 million back then), and there’s optimism everywhere… partly because of this new California rule, but also partly because it seems like the industry, at least in the US, has evolved into a duopoly without a lot of price competition. Which is a surprise for a relatively anonymous product like a power inverter that you’d think would be a commodity.

Enphase is not cheap on most valuation metrics — it trades at about 6X sales and more than 60X trailing earnings, but that huge 130% revenue growth number in the past year is certainly enticing. Analysts see them earning 89 cents per share this year (one quarter left to go), and growing that to $1 in 2020 and $1.23 in 2021, so that means you’re paying about 24X forward earnings for a company that’s expected to grow earnings about 15% a year over the next couple years. The interesting thing is that analysts are assuming no real scalability as the business grows, with the revenue expectations actually indicating slightly higher revenue growth than profit growth for the next couple years — which means that there’s probably room for them to beat those earnings expectations if the company is managed well and the market opportunity is as compelling as expected.

Still, that would mean they’re really just growing revenues by 50% between this year and 2021… which is really strong, but, of course nowhere near the daydreams of 10,000% sales growth that Robinson and his copywriter are spinning for us here.

So what might the change to the market be in California next year? Well, as we noted, about 80,000 homes are built each year… and all of them will have to have solar panels. If it’s a somewhat average-size house, estimates I see are that you’re probably looking at about 22 solar panels for the average installation. If you’re using microinverters like Enphase makes, as has become much more popular lately (they’re more efficient and let you use panels individually, instead of as one big system), then that would be one microinverter per panel. 22 microinverters per house and 80,000 houses means you’re looking at new demand of perhaps 1.8 million microinverters in California. Each one is somewhere in the $100-150 range retail, so that’s a total new home construction market potential of probably somewhere in the $225 million neighborhood.

Not all installations will use microinverters, and not all microinverters are made by Enphase, but yes, that is clearly a reason to have some optimism about the growth of their market — and while California is certainly the biggie, they’re not the only state pushing solar power installations, and there’s also a steady business in adding solar panels to existing homes. It does seem that Enphase has righted the ship after almost going out of business a couple years ago, and they’ve seen strong demand for their products.

If you want to begin to dig in a bit deeper, there was a good Motley Fool story looking at the inverter business and the two big players (Enphase and SolarEdge) about six weeks ago, and you can see Enphase’s latest investor presentation here.

And in the interest of time and letting you get to your own research, I’ll leave it there — have any thoughts on Enphase or on the potential of other companies in the solar space? Let us know with a comment below… and, of course, if you’ve ever subscribed to Radical Technology Profits then your fellow investors want to know what you thought of it — just click here to share your opinion on that newsletter.

P.S. No, Enphase microinverters do not somehow magically make it possible to generate solar power when the sun isn’t shining… but they are also focusing on selling whole systems with “energy management” that are not just linked to the grid but also include energy storage. Whenever you see “solar power at night” teaser pitches, they’re almost always about energy storage — Enphase doesn’t appear to offer anything uniquely better or different than other energy storage systems, but perhaps they’ll be able to use their market position in microinverters to grow the sales of those connected systems.


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AJD
Irregular
AJD
February 18, 2020 3:53 pm

If you generate DC current from solar panels, wind, water wheel, hamsters running, etc.. that electricity will need to be converted into AC current by an inverter to power AC devices or feed the power grid. DC current can be stored in batteries and later converted with an inverter into AC power. An inverter is needed in most micro-generator systems. ENPH might be poised to skyrocket or other competitors will flood into this space and reduce ENPH’s market share… we shall see

BRUCE JOHNSON
Member
BRUCE JOHNSON
February 18, 2020 5:29 pm
Reply to  AJD

AJD you are correct. Enphase micro inverters convert each panel voltage from DC to AC right at the panel and sends that down to the box at 120 volts AC. Competing “string” design systems connect one panel to the next with DC and ultimately reach a very high voltage in the cables on the roof, sending that DC current down to a central converter box. One issue with the string system is the high voltage can arc and cause a fire. Happened once on a Walmart (I think) and resulted in significant fire damage. Another danger is possible electrocution due the high voltage.

I had an investment in $ENPH when I decided to install a solar PV system on my home in Florida, so insisted in Enphase IQ7+ equipment (86 panels). Very pleased with the results and the investment profit more than covered the cost. My system has no batteries and is connected to the utility grid.

Enphase recent development has been a microinverter that can handle two panels, so a system would have only half as many inverters as prior and make their equipment more friendly for Industrial applications – larger scale than residential. The next development planned for release is their IQ8 micro inverter, which they say will make a PV system “grid agnostic” meaning it can control electrical energy from any source: PV panels, utility grid, generator, battery, all seamlessly thus allowing for easy transition between grid-tied and off-grid operation.

Did not see anything about “dark burst”.

bvekov
Irregular
bvekov
February 18, 2020 6:57 pm

Travis thanks for the heads up today!! Got in before the closing bell!!

Steve
Guest
Steve
February 18, 2020 9:52 pm

Bought 200 shares of ENPHASE at the end of December at $25. Price is now over $40 Seems like a solid investment.

ggswift
February 19, 2020 10:00 am

Don’t despair if you feel as if ya missed out on the ENPH run. GGSWIFT has your back ! Ya may wish to consider the little powerhouse ELA …..one firm says ELA is worth $4.00 ! It may be time to Lock & Load! Here is the website ……https://envela.com/press-release/ Scout around and check it out , I think you WILL be happy by what you see! Good Luck To All!

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iltrus
Irregular
February 19, 2020 10:27 am

OMG this rookie purchased ENPH for $29.69 for a total of $3265. Today those 110 shares are worth $5849 (about 80% more!!!) I sold one third right away, before shares go down again. I wish we had more of such opportunities.

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Sital
Guest
Sital
February 19, 2020 3:42 pm

Good advice Travis. You are great!!

kymberz
Member
kymberz
February 20, 2020 5:09 pm

i could kill myself over bitcoin! no one saw that coming! but everyone laughed when i predicted trump and the guy isn’t named trump for no reason! and then the bible talks about everything having a season? was that a psalm or ezekiel? discipline is my middle name and how on earth did i not jump on bitcoin? eh? reasons and seasons are like raisins and snow angels. and roses by any other….oh you know the rest! can i get an Amen/Alleluia? you write really well!

talktome
February 21, 2020 12:21 pm
Reply to  kymberz

Probably because you believe in the end of times…I can understand why you would do it:)

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talktome
February 21, 2020 12:17 pm

It’s going to fall again, buy it then:)

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