NEW YORK (TheStreet) -- Shares of Hanwha SolarOne Co. (HSOL) were up 1.4% to $2.90 in aftermarket trading on Friday. The stock has regained ground it lost during the day as it closed down 1.0% to $2.86.
Solar energy stocks experienced a boost Friday after it was announced that the tax credits that incentivize renewable energy production and investment -- which had expired earlier this year -- were likely to be renewed, according to Sen. Sheldon Whitehouse (D-R.I.).
TheStreet Ratings team rates HANWHA SOLARONE CO LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate HANWHA SOLARONE CO LTD (HSOL) 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 and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 2.84 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, HSOL maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for HANWHA SOLARONE CO LTD is rather low; currently it is at 22.30%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, HSOL's net profit margin of -2.57% significantly underperformed when compared to the industry average.
- 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, HANWHA SOLARONE CO LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- This stock has increased by 269.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in HSOL do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- HANWHA SOLARONE CO LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, HANWHA SOLARONE CO LTD continued to lose money by earning -$1.70 versus -$2.97 in the prior year.
- You can view the full analysis from the report here: HSOL Ratings Report