Trade-Ideas LLC identified

SunPower

(

SPWR

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

  • SPWR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.3 million.
  • SPWR has traded 313,579 shares today.
  • SPWR is down 3.4% today.
  • SPWR was up 11.1% yesterday.

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More details on SPWR:

SunPower Corporation designs, manufactures, and delivers solar systems to residential, commercial, and utility-scale power plant customers worldwide. The company offers solar power components, including panels, balance of system components, and inverters. SPWR has a PE ratio of 27. Currently there are 10 analysts that rate SunPower a buy, no analysts rate it a sell, and 3 rate it a hold.

TheStreet Recommends

The average volume for SunPower has been 1.4 million shares per day over the past 30 days. SunPower has a market cap of $3.2 billion and is part of the technology sector and electronics industry. The stock has a beta of 3.44 and a short float of 15.1% with 5.30 days to cover. Shares are up 5.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SunPower as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
  • SUNPOWER CORP 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SUNPOWER CORP increased its bottom line by earning $1.56 versus $0.57 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $1.56).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SUNPOWER CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • 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 53.8% when compared to the same quarter one year ago, falling from $14.10 million to $6.51 million.

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