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Hawk’s Nest

Option Traders Position for Solar Rally and Score Huge Gains

by | Aug 7, 2022

SunRun (RUN) shares have rallied nearly 100% since our bullish write-up on 5/1 while the calls in August have gained substantially more.

On 5/13 we wrote:

Sun Run (RUN) bull spreads this week were active selling the January $17.50 puts and buying the $20/$55 call spread 2000X as well as spreads earlier selling the $15 puts and buying the $22.50/$55 call spread. RUN has also seen sellers recently in the August $20 puts, 5000X while the August $25 calls bought over 8000X and the June $25 calls were bought 8000X on 4/22 and open interest has swelled to 24,850X. RUN has made a huge round trip from the highs in early 2021 near $100 back to a big high-volume node that started in 2018 and stretched into mid-2020. A bounce here has room back up to $30 while yearly value-low is up near $39.50. The $4B company trades 2.3X sales and 6.5X cash. RUN is coming off of a solid quarter guiding to 25% growth in capacity installed by 2022, higher than previously expected, and follows strong net subscriber guidance to start the year. RUN has been implementing price hikes to combat higher material costs and continuing to see strong demand driven by utility rate inflation. The company has a potential positive catalyst upcoming with the resolution to the DOC investigation into panel imports.  Analysts have an average target for shares of $59 with a Street High $89. Truist with a Buy rating and $52 PT for shares while Piper has an Overweight on shares and thinks clarity around supply chain headwinds and policy can be a positive driver into the 2H. MSCO with an $89 PT for shares was out on 5/5 positive saying the increased 2022 installation guidance was a significant positive surprise especially in light of the ongoing Department of Commerce AD/CVD investigation. Hedge fund ownership fell 20% last quarter.”