Portfolio Update: Adding Nextpower
The business did not change. The margin of safety did.
At around $94 NXT 0.00%↑ , the risk/reward changed enough to act.
Nextpower is the global leader in solar tracking systems, but the business is becoming broader than the market’s hardware label suggests.
It is building an integrated energy platform across:
solar trackers
foundations and electrical systems
power electronics
optimization software
robotics and services
Customers use its technology to reduce project costs, accelerate construction, improve energy production, and increase plant reliability.
The economics are strong:
five-year average ROIC above 26%
operating margin above 20%
strong cash conversion
capital-light model
net cash balance sheet
disciplined, adjacent acquisitions.
The moat comes from scale, engineering, execution, bankability, and system integration.
Nextpower has led the global tracker market for a decade, serves most leading asset owners, and its products are mission-critical to utility-scale solar projects.
But this is not a risk-free compounder.
Part of recent profitability benefits from policy support.
Large projects can be delayed.
And the expansion beyond trackers still needs to prove that it can generate returns close to those of the core business.
At roughly 27x earnings, the market already recognizes much of the quality.
The thesis is not that Nextpower is obviously cheap.
It is that the price has moved closer to the lower end of fair value while the long-term opportunity remains intact.
The technical setup is also stronger than most of the current investable universe.
You can access the live portfolio here:
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