Sunny Disposition

I woke up to some awfully big news today in the security world as ADT announced the divestiture of its commercial business.

If one of you, dear readers, had an inkling about this occurring before it did, I’d like to know your sources, or at least have you pick some lottery numbers for me. When I read about divestiture it normally tracks pretty easily for me. For example, when Securitas dropped its Argentinean holdings, I wasn’t shocked. They had been facing a tough economic situation and it made sense for them to trim the fat, so to speak, and I wouldn’t be shocked if Turkey was next.

In ADT’s case, however, it’s the opposite as far as I can tell. Their commercial business seemed to do well, whereas residential and solar continue to under perform for a number of reasons. Do I think they could or should offload either solar or residential/small business to back their commercial side, no chance. Did I imagine they were going to sell commercial to reduce debt and prop up the future of solar and residential, not even a little bit.

This just shows ADT’s big gamble on the future. Residential will probably bounce back soon. Depending on who you ask it’s already started to trend that way. The big bet here is on solar, and a future where green energy is big business. A friend of mine recently mentioned that whoever backs the first company to perfect carbon capture is going to strike it rich, and I couldn’t agree more.

So, if ADT is willing to make a $1.6 billion dollar bet on its other businesses, what do they know that you don't? It might benefit a savvy investor that can see which way the solar winds are blowing.