Sunedison Inc (NYSE: SUNE)
Sunedison has had an incredibly rough time in the market over the course of the last several months. However, news that was released today may be just what the stock needed to start moving in the positive direction. Early today, SUNE announced that it has signed an agreement with the city of San Diego. Today, we’ll discuss the details of the agreement, how the market reacted to the news and what we can expect to see from SUNE moving forward.
SUNE Signs A Power-Purchase Agreement With The City Of San Diego
Sunedison, the renewable energy powerhouse announced today that it has entered into an agreement with the city of San Diego. According to the 20 year power purchase agreement, Sunedison will provide the city with 6.6 megawats of solar panels that will be installed across 25 city owned properties. Estimates by the city project that the new plan will save taxpayers around $22 million. In a statement following the announcement, Sam Youneszadeh, regional manager of the Western US solar business at SUNE had the following to say…
“Smart cities like San Diego are using solar to save money now, and to hedge against rising utility rates… Sunedison has a proven track record of delivering high quality solar systems to hundreds of city and government customers across the US – we know how to help our customers get the best solution when it comes to saving money with solar.”
How The Market Reacted To The News
As we’ve come to expect any time we see positive news with regard to a publicly traded company, SUNE is having a great day in the market today. Currently (9:47), the stock is trading at $4.01 per share after a gain of 16.23%.
Is This The News SUNE Needs To Start Moving In The Right Direction?
The question above is a relatively hard one to answer. In the short term, the answer is blatantly clear by the activity we’re seeing in the market today. In the short term, we can expect to see gains. However, will this be enough to pick SUNE up and provide a new level of support for the stock? In my opinion, the long term answer is no! While the San Diego deal is big, San Diego is just one of hundreds of city and government contracts that SUNE has throughout the United States, as mentioned by Youneszadeh. Unfortunately, these contracts haven’t been a key cause of support in the past and won’t likely be one in the future. While I know that I’m going to upset my fair share of investors by saying this, I still have a relatively bearish outlook of what we can expect to see from Sunedison moving forward.
As I’ve mentioned several times in the past, SUNE is a company that’s focused on renewable energy, meaning it plays a role in the energy sector. Unfortunately, the energy sector is currently struggling, and not likely to improve any time soon. While SUNE is focused on renewable energy, the sector as a whole is heavily dependent on oil prices. With the massive supply glut in the market and poor economic conditions around the world weighing heavy on demand, it seems as though oil is likely to continue struggling for years to come! As a result, SUNE is one basket that I wouldn’t be willing to put my eggs into.
What Do You Think?
Where do you think SUNE is headed and why? Let us know your opinion in the comments below!
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