Trade-Ideas LLC identified

SunEdison

(

SUNE

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified SunEdison as such a stock due to the following factors:

  • SUNE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $199.7 million.
  • SUNE has traded 728,731 shares today.
  • SUNE is down 6.1% today.
  • SUNE was up 6.8% yesterday.

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More details on SUNE:

SunEdison, Inc. develops, manufactures, and sells silicon wafers to the semiconductor industry. The company operates through three segments: Solar Energy, TerraForm Power, and Semiconductor Materials. Currently there are 10 analysts that rate SunEdison a buy, no analysts rate it a sell, and 3 rate it a hold.

TheStreet Recommends

The average volume for SunEdison has been 37.1 million shares per day over the past 30 days. SunEdison has a market cap of $2.2 billion and is part of the technology sector and electronics industry. The stock has a beta of 4.86 and a short float of 34.4% with 3.58 days to cover. Shares are down 60% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SunEdison as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 541.5% when compared to the same quarter one year ago, falling from -$41.00 million to -$263.00 million.
  • The debt-to-equity ratio is very high at 16.97 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, SUNE has a quick ratio of 0.69, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly decreased to -$596.00 million or 658.26% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.22%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 323.80% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • SUNEDISON INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SUNEDISON INC reported poor results of -$4.41 versus -$2.39 in the prior year. This year, the market expects an improvement in earnings (-$3.37 versus -$4.41).

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