NEW YORK (TheStreet) -- SunEdison (SUNE) stock is plunging 16.23% to $3.82 on heavy volume in early afternoon trading on Tuesday, as hedge fund manager David Einhorn's Greenlight Capital slashed its position in the company by 25%.
As of September 30, the hedge fund had reduced its stake in the company to 18.2 million shares, Barron's reports.
Greenlight Capital noted that its losses so far this year "came primarily" from SunEdison, Micron Technology (MU) and CONSOL Energy (CNX), Barron's adds. SunEdison stock has declined 73% this past year.
Additionally, SunEdison appears to have reclassified about $739 million of debt from "non-recourse" to "recourse," which means that the lenders can now access more of the company's collateral, CreditSights analysts said in a note yesterday, Bloomberg reported.
About 50.98 million shares of SunEdison have been traded so far today, well above the company's average trading volume of roughly 35.97 million shares.
Separately, TheStreet Ratings team rates SUNEDISON INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate SUNEDISON INC (SUNE) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 8.33 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, SUNE maintains a poor quick ratio of 0.76, which illustrates the inability to avoid short-term cash problems.
- Looking at the price performance of SUNE's shares over the past 12 months, there is not much good news to report: the stock is down 74.60%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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's earnings per share declined by 19.5% in the most recent quarter compared to 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 -$4.12 versus -$2.39 in the prior year. This year, the market expects an improvement in earnings (-$3.59 versus -$4.12).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SUNEDISON INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry average. The net income has remained constant at -$284.00 million when compared to the same quarter one year ago.
- You can view the full analysis from the report here: SUNE
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.