The company I'm watching in 2023 can't even be invested in yet; MN8 Energy (MNX) filed for a NYSE listing under the symbol MNX in September 2022 after Goldman Sachs Asset Management created it in 2017, notes Adam English, editor at The Profit Sector.
It seems like ages ago, but the first wave of renewable energy — with its hype, share dilution, bureaucratic delays, and obscene cap-ex costs — is long over. Dare I even mention the specter of SolarCity?
I have nothing against fossil fuels, but the energy sector will be in wealth extraction mode in 2023. Chasing that trend would be "a day late and a dollar short" — or a year late and a whole lot more short.
What do I like about MN8? A big part is that it may offer a relatively clean slate. There shouldn't be the kind of legacy cost averaging, debt, or subpar returns on investment baked in.
Plus I think these kinds of solar and battery storage projects can move forward if they're clearly going to be profitable — regardless of fringe politics. Many have in the last decade, even without subsidies. I think people really don't care where power comes from, outside of NIMBY issues, as long it is cheap.
What I don't like is that we don't get a peek at MN8's books yet. I want to see reasonable debt levels, debt rotation and low interest rates, and the IPO fueling growth potential instead of an underwriter cash-out opportunity.
IPOs really aren't a place for retail investors, though. A couple months in, I plan on taking a good hard look at the company with at least a time frame of several years. As long as there are signs it can scale revenue with operating costs, it doesn't sacrifice P&L ratios, and there are no obvious red flags, I'll be intrigued.
