NEW YORK (TheStreet) -- Shares of SunEdison (SUNE) were falling 3.3% to $30.35 after the solar module maker and its TerraForm Power (TERP) YieldCo announced the closing of the acquisition of Atlantic Power's (AT) 512 MW wind power portfolio.
SunEdison formed its second warehouse facility, named TerraForm Private Warehouse, to hold the operating assets for a maximum of seven years. The warehouse facility is $525 million in aggregate size, according to the company.
The acquired wind plants in the portfolio are located in Idaho and Oklahoma, and are contracted under term power purchase agreements with investment grade utilities.
"We're pleased to complete the closing of Atlantic Power's operating assets utilizing TerraForm Private Warehouse, our new operating asset warehouse facility," SunEdison CFO Brian Wuebbels said. "This warehouse is integral to securing the future growth of the SunEdison-TerraForm platform, and provides repeatable and scalable funding."
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 42.06% 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