Investing

Array Technologies Stock Options See Bullish Activity After Funds Pour In

Larry Ramer

Published: June 5, 2023 10:34 pm

Solar energy play Array Technologies (US:ARRY) has been the focus of a surge in bullish options activity in recent days. With ARRY stock up almost 30% in the last month, its looking like the sizable first-quarter purchases by many well-known financial institutions have helped the momentum.

As ARRY stock has gained, it has far outpaced the Invesco Solar ETF (US:TAN), which has eked out a 2.7% increase. That exchange-traded fund holds the Albuquerque, New Mexico company, at 3.8% allocation, among its top 10 holdings among the 45 names in the fund.

Array’s flagship product is a solar tracker called DuraTrack. By rotating solar panels so that they remain at optimal angles to the sun, DuraTrack and other trackers can increase panels’ electricity output by roughly 30%.

The recent institutional moves come as global renewable capacity additions are set to soar by 107 gigawatts (GW), the largest absolute increase ever, to more than 440 GW in 2023, according to the International Energy Agency. This is equivalent of more than the entire installed power capacity of Germany and Spain combined, the organization reported last week.

Meanwhile, the U.S. Bureau of Labor Statistics lists “solar photovoltaic installer” among the projected fastest-growing occupations between 2021 and 2031, with an expected growth rate of 27%.

Bullish Options Action

The overall put/call ratio of Array stock on both June 2 and June 1 was 0.48, as call option buyers obtained options on double the number of shares as those who acquired puts, fintel.io data shows. From May 23 to May 31, the put-call ratio was even more bullish, ranging from 0.36 to 0.38.

For options that expire on June 16, the put/call ratio was 0.56 as of June 2, while the ratio for the options expiring on July 21 was 0.53. The ratio for the August 18 expiration date was a much less bullish 0.80., but the ratio for Oct. 20 was a very upbeat 0.22.

On May 22, Seaport Research began coverage of ARRY stock with a ‘buy’ rating. The firm expects the company to benefit from increased demand for trackers, and it believes that 2023 financial results can exceed its current guidance. Seaport put a $30 price target on the shares; the stock closed at $23.76 on June 2.

The consensus analyst 12-month target on ARRY shares compiled by Fintel is $27.80, or 16.8% upside from current levels. Recommendation trends show the majority of analysts (16) have the stock rated as a ‘buy’, five call it a ‘strong buy’, four have it as a ‘hold’ and only one is telling clients to ‘sell’ Array Technologies stock.

Institutions Pour In

Ameriprise Financial reported on May 24 that it had bought 12,135 shares of ARRY stock in Q1, while Rockefeller Capital Management on May 16 reported that it had acquired 633,455 shares of ARRY in Q1. 

They joined Royal Bank of Canada, which obtained 60,094 shares of ARRY in Q1, according to a May 15 filing. Also reporting on May 15 that it had snapped up ARRY stock in Q1 was Deutsche Bank, which acquired 412,086 shares.

Investment manager D.E. Shaw snapped up 658,722 shares in Q1, it noted on May 15. Obtaining 92,507 shares in Q1 was Canada Pension Plan Investment Board, it reported on May 15, while Point 72 Asset Management, the hedge fund owned by the New York Mets owner and multi-billionaire investor, Steven Cohen, scooped up 658,722 shares in Q1.

Meanwhile, Wells Fargo acquired 198,926 shares in Q1, the bank reported on May 12, and on the same day BlackRock noted that it had bought 881,672 shares in Q1. Finally, Schroeder Investment Management, a British investment manager with over 735 billion British pounds of assets under management, acquired 2.07 million shares.

This article originally appeared on Fintel