Looking For An Ideal Position In Public Grid Tech? Raymond James Highlights Silver Spring Networks

Year-To-Date: Down ~15 percent
Three-Month Performance: Down ~17 percent
Single-Month Performance: Down ~6 percent
Time Of Writing: Up 12.83 percent on the day at $12.14

Raymond James' Pavel Molchanov upgraded

Silver Spring Networks IncSSNI

from Outperform to Strong Buy with a price target of $16.00. Since last December's high, shares are down 27 percent essentially due to multiple compression. The company had no missteps other than the CFO's departure. Actually, backlogs are at an all-time high after the ConEd mega-contract was received.

"Much of the recent weakness came since the CFO's departure on June 6 — even though Silver Spring explicitly reaffirmed guidance, directly addressed the common perception that a CFO change means something nefarious," Molchanov stated. If any company can survive without a CFO, it is Silver Spring with its zero debt, no need to tap the markets and no roll-up activity.

The idea of a buyout isn't out of reach. With Honeywell International Inc. HON's acquisition of Elster and Oracle Corporation ORCL's buyout of Opower, large tech companies are attracted to upgrading grid hardware and software. "A scenario at some point is not far-fetched," Molchanov noted.

Secondly, an investor who wants to position himself in the public grid tech sector has very few public options, and Silver Spring Networks shares could see some uplift due to this scarcity.