NEW YORK (TheStreet) -- SunEdison (SUNE) shares are down 6.5% to $20.24 on Monday on heavy trading volume as solar energy stock continue to decline seemingly in concert with the decline of oil prices.
Analysts believe that investors are selling off their energy stocks due to the fear that lower oil prices will dampen consumer demand for alternative energy solutions like solar, though some analysts believe this is foolhardy because solar power isn't competitive with fossil fuels.
"Investors appear to be worrying that falling oil prices will dampen enthusiasm for building new solar plants, since lower oil prices mean solar power will be less competitive with more traditional power sources derived from fossil fuels. The only problem with that logic is that solar power was never competitive with fossil fuels to begin with, meaning solar stocks could be getting punished for no good reason," said Doug Young of Young's China Business Blog.
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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 a few notable weaknesses, 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 deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and poor profit margins."