Thoughts on Boralex’s fall from grace.

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I’m trying to understand why BLX tanked from 50+ in mid Jan to under 38 on Friday. I’m no financial expert, (truth be known I have a hard time understanding any of it) but everything I’m reading indicates it’s doing well. There was even an article title “What a year Boralex is having” or something like thatπŸ€”. If you have any insights, or better yet if you actually know why I would appreciate it, oh great Guru.

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Asked on March 20, 2021 5:38 pm
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Hi Oscar,

This is not unique to Boralex. ALL renewable plays have been under significant pressure since mid-January. To be honest, it is not all that surprising.

The industry was white-hot leading into 2021 and many were trading near at or near all-time high valuations. So, the pullback is actually warranted for many of these companies - Boralex included.

THe only thing that is likely impacting Boralex a little more than others - growth is starting to slow. This used to be a company that was growing by double-digits but expectations over the next couple of years has dropped. Not that this is a bad thing, but that slowing growth means that investors are willing to pay less of a premium for the company.

This is not to say Boralex is a bad company. Its not and will be just fine over the long term. I view this entire industry correction as healthy and consolidation in this area before the next leg up would also be a good thing. Sometimes stocks just rise too much, too fast and then you see these types of corrections. Doesn't mean it is not performing - it just means that over-enthusiasm by investors drove the price up. Now that momentum has faded, it is 'coming back down to earth' so to speak.

Overall though - solid company.

Mat

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Posted by Mathieu Litalien
Answered on March 21, 2021 7:44 am