Sunedison Inc (NYSE: SUNE)
Sunedison has been a very interesting stock to watch over the past few months. While the company was on top of the world mid-last year, that changed – and quickly. Late last year, investors started to get concerned with the amount of debt that SUNE had amassed. Not to mention, many didn’t like the massive acquisitions being made by the company. So we watched as the stock sank, falling from Over $31 per share to today’s levels at under $2 per share. However, in recent trading sessions, we’ve started to see a bit of a rally. In my opinion, this rally is likely to continue, and in a big way. In fact, at current levels, SUNE is an absolute steal. Now, the rally is continuing today, and for good reason. Below, we’ll talk about why the gains are continuing today, other reasons I’m bullish on the stock, and what we can expect to see from Sunedison moving forward. So, let’s get right to it!
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Why We’re Seeing Gains Today
On top of other recent positive news, today, SUNE was the subject of more by way of positivity. One of the factors that helped to drag SUNE down so far was an agreement with Latin American Power Holding. Ultimately, Sunedison was set to acquire the company. However, thanks to major negative net profits and operating margins, the company decided against the acquisition. Soon, Latin American Power shareholders started to show their disappointment and, eventually, a lawsuit was filed. However, it was recently announced that SUNE and TerraForm Power will be resolving all of The disputes in arbitration and the parties have agreed to dismiss the action filed in the New York State Court without prejudice.
Other Reasons To Be Bullish On Sunedison
While SUNE has been dealt a relatively heavy hand as of late, there are still plenty of reasons to be bullish on the stock. Here are some of my favorites:
- Sheer Size – One of the things that really gets me excited about SUNE is the size of the company. On a scale that takes assets into consideration, Sunedison is the largest company in the solar power industry. While they have had to figure out their way around a few hurdles recently, the value in the assets owned by the company is tremendous. These assets will eventually lead SUNE to a profitable state.
- Current Price – Due to concerns with regard to debt and court cases, SUNE has been dealing with massive decreases in the value of its stock. Generally price movements in the market happen through a series of overreactions, and I have to say the declines are an overreaction at best. As a result, the stock is sitting at under $2, which offers a tremendous discount to those with the testicular fortitude to buy it!
- Changes In The Energy Sector – The energy sector is slowly, but surely, changing. The reality is that governments, consumers, and businesses alike are worried about the Effect burning fossil fuels has on our planet. As a result, consumers are purchasing more solar power today than ever before. On top of that, Paris reached a landmark climate-change deal under which 195 countries have agreed to reduce greenhouse gas emissions. To do so, they will have to reduce reliance on burning fossil fuels. This will lead to even higher demand for solar and other forms of renewable energy.
- SUNE Is Purchasing Vivint – We also received news recently that SUNE would be purchasing Vivint Solar. While David Tepper did everything he could to stop the purchase, the court ruled against Tepper, and SUNE is able to move forward with its acquisition.
- Sunedison Debts – Finally, I’m aware that Sunedison has a very large amount of debt. This is one of the reasons for the recent declines. However, I’m not concerned about the debt in the least. That’s because of the massive amount of assets the company owns. The truth is that if SUNE decided today that it wanted to sell all of its assets, the company would be able to pay off its debts with more than $4 billion left over. In fact, in this case, after paying off debts, SUNE would have more than $14 per share to divide between shareholders! So, to me, the debt the company holds really isn’t a concern.
What We Can Expect To See Moving Forward
At this point, it’s my opinion that SUNE has finally made it to the path of recovery. Now, I will say that thanks to the bears and some uncertainty revolving around the company, the recovery will be slow. However, I do believe that the company is on a path toward recovery nonetheless. So, now is likely a great time to get in on the future gains at an incredible discount.
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What Do You Think?
Where do you think SUNE is headed moving forward? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]