Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified ReneSola ( SOL) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified ReneSola as such a stock due to the following factors:
- SOL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.0 million.
- SOL has traded 550,890 shares today.
- SOL is down 3.2% today.
- SOL was up 8.1% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in SOL with the Ticky from Trade-Ideas. See the FREE profile for SOL NOW at Trade-Ideas More details on SOL: ReneSola Ltd operates as a brand and technology provider of solar photovoltaic (PV) products. The company, through its subsidiaries, engages in the research and development, and manufacture of virgin polysilicon, monocrystalline and multicrystalline silicon wafers, and PV cells and modules. Currently there are no analysts that rate ReneSola a buy, no analysts rate it a sell, and 1 rates it a hold. The average volume for ReneSola has been 4.8 million shares per day over the past 30 days. ReneSola has a market cap of $277.0 million and is part of the technology sector and electronics industry. Shares are up 124.7% year-to-date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates ReneSola as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins 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 154.7% when compared to the same quarter one year ago, falling from -$78.61 million to -$200.25 million.
- The debt-to-equity ratio is very high at 5.54 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, RENESOLA LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for RENESOLA LTD is currently extremely low, coming in at 14.68%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, SOL's net profit margin of -47.76% significantly underperformed when compared to the industry average.
- RENESOLA LTD 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, RENESOLA LTD reported poor results of -$2.80 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings (-$0.79 versus -$2.80).
- You can view the full ReneSola Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.