Why One Investor Slashed Its Sunrun Position But Kept a $129 Million Wager on the Stock
Key Points
Toronto-based Maple Rock Capital Partners sold 692,800 Sunrun shares in the third quarter.
The value of the overall position fell by $62.1 million from the previous period.
As of September 30, the fund reported holding 7.4 million Sunrun shares worth about $128.6 million, making the position its fourth-largest holding.
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Toronto-based Maple Rock Capital Partners disclosed a reduction in its Sunrun (NASDAQ:RUN) stake, cutting 692,800 shares in the third quarter, according to a November 14 SEC filing.
What Happened
According to an SEC filing dated November 14, Maple Rock Capital Partners sold 692,800 shares of Sunrun during the third quarter. The value of the position fell by about $62.1 million in the period. Following the sale, the fund reported still holding 7.4 million Sunrun shares valued at $128.6 million.
What Else to Know
Sunrun now represents 5.1% of Maple Rock's 13F assets under management.
Top holdings after the filing:
- NASDAQ: WDC: $310.9 million (12.6% of AUM)
- NYSEMKT: EQX: $186.7 million (7.5% of AUM)
- NASDAQ: STX: $174.8 million (7.1% of AUM)
- NASDAQ: RUN: $128.6 million (5.2% of AUM)
- NYSE: TFII: $96.7 million (3.9% of AUM)
As of Tuesday, Sunrun shares were priced at $17.87, up 59% over the past year and well outperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Tuesday) | $17.87 |
| Market Capitalization | $4.1 billion |
| Revenue (TTM) | $2.3 billion |
| Net Income (TTM) | ($2.5 billion) |
Company Snapshot
- Sunrun offers residential solar energy systems, battery storage solutions, and related products and services, with revenue primarily generated from system sales, installations, and ongoing service agreements.
- The company operates a direct-to-consumer business model, earning revenue through the sale and lease of solar systems, as well as through long-term customer contracts for energy services and storage solutions.
- It targets residential homeowners across the United States as its primary customer base.
Sunrun is a leading provider of residential solar and battery storage solutions in the United States. The company leverages a direct sales approach and long-term service contracts to drive recurring revenue and expand its footprint in the growing renewable energy sector. Sunrun's integrated offering and national reach position it as a key player in the transition to distributed clean energy for homeowners.
Foolish Take
Maple Rock’s move here looks more like a recalibration than a retreat. Sunrun is still one of the fund’s largest positions, suggesting continued conviction in the company’s ability to compound value as its unit economics strengthen.
The third quarter offered evidence of that shift. Sunrun reported $724.6 million in revenue, up 35% from a year earlier, and delivered its sixth straight quarter of positive cash generation, reaching $108 million in the period. Margin trends also improved, with net subscriber value rising 38% year over year and contracted net value creation increasing 35% to $279 million. If Sunrun sustains these trends while moderating installation costs, the company could emerge from its post-pandemic volatility with a more mature and cash-generative model.
Ultimately, Sunrun remains a complex story, but its improving cash generation, higher storage penetration, and stronger subscriber value creation all point to a business regaining financial footing. After a sizable increase in share value, that's likely why Maple Rock decided to trim -- but not erase -- its holdings.
Glossary
13F AUM: The total market value of assets under management reported by institutional investment managers on SEC Form 13F.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The ownership interest or shares held in a company by an investor or fund.
Direct-to-consumer business model: A sales approach where a company sells products or services directly to end customers, bypassing intermediaries.
Service agreements: Contracts outlining ongoing services provided to customers, often including maintenance or support for a product.
Lease (in solar industry): An arrangement where customers pay to use solar equipment owned by another party, rather than purchasing it outright.
Distributed clean energy: Energy generated from renewable sources at or near the point of use, rather than centralized power plants.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends TFI International. The Motley Fool has a disclosure policy.
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