SunEdison Semiconductor (SEMI) Stock Falls After Pricing Public Offering

NEW YORK (TheStreet) -- Shares of SunEdison Semiconductor (SEMI) were falling 4.1% to $18.41 on heavy trading volume Thursday after the silicon wafer manufacturer priced the 15,935,828 ordinary shares sold by shareholders in a public offering.

SunEdison Semiconductor priced the 15,935,828 ordinary shares sold by shareholders in the public offering at $18.25 a share. The company will not receive any proceeds from the offering as it is not selling any shares.

Deutsche Bank Securities (DB) and Goldman Sachs (GS) are acting as lead book-running managers for the offering.

The offering is expected to close on July 1, 2015.

About 3.1 million shares of SunEdison Semiconductor were traded by 9:35 a.m. Thursday, well above the company's average trading volume of about 117,000 shares a day.

TheStreet Ratings team rates SUNEDISON SEMICONDUCTOR LTD as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUNEDISON SEMICONDUCTOR LTD (SEMI) a SELL. This is driven by a number of negative factors, 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 weak operating cash flow and poor profit margins."

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

  • Net operating cash flow has decreased to $34.60 million or 21.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The gross profit margin for SUNEDISON SEMICONDUCTOR LTD is rather low; currently it is at 23.52%. Regardless of SEMI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SEMI's net profit margin of -4.66% significantly underperformed when compared to the industry average.
  • SEMI, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
  • Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SUNEDISON SEMICONDUCTOR LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: SEMI Ratings Report

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