SunEdison (SUNE) Stock Rising Following Acquisitions

NEW YORK (TheStreet) -- Shares of SunEdison Inc. (SUNE) are higher by 2.25% to $30.95 in mid-morning trading on Tuesday, after the solar energy products and solutions provider announced it has agreed to acquire Globeleq Mesoamerica Energy, the leading renewable energy company in Central America.

The value of the transaction was not disclosed. SunEdison said the deal will close in the 2015 third quarter.

"The acquisition will solidify SunEdison's position as the largest renewable energy developer in Central America as it expands its presence in the global renewable energy market," the company said in a statement announcing the transaction.

Additionally, SunEdison announced that it has also agreed to acquire Continuum Wind Energy Limited, Singapore with assets in India. The value of this transaction was also not disclosed.

"India is a core market forSunEdison and offers growth opportunities in wind and solar energy," company CEO Ahmad Chatila said in a statement.

"With the acquisition of Continuum, a leading wind energy company in India, we have added significant assets and a skilled wind development team to drive further growth in our renewable energy development platform. This acquisition reinforces SunEdison's commitment to India and will drive immediate shareholder value," Chatila added.

This deal will also close in the 2015 third quarter.

Separately, TheStreet Ratings team rates SUNEDISON INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUNEDISON INC (SUNE) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 59.11% and other important driving factors, this stock has surged by 56.21% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 39.4% when compared to the same quarter one year prior, rising from -$614.00 million to -$372.00 million.
  • 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 debt-to-equity ratio is very high at 77.64 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 0.37, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has decreased to -$308.00 million or 43.12% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: SUNE Ratings Report

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