SunEdison Inc (NYSE: SUNE)
SunEdison has been a very interesting stock to watch as of late. After positive news with regard to global governmental input on the topic of climate change and tax credits in the United States, SUNE started to soar. However, shortly following all of the good news, bad news came and smashed the stock’s growth, sending SUNE in a downward spiral. Now, investors are a bit confused as to what to expect from here. Is it time to buy or time to sell? In my opinion, it’s time to buy! Today, we’ll talk about why.
Follow Warren Buffet’s Lead
You’ve heard of the great Warren Buffet right? If not, you’re likely living under a rock. If you want to be a great investor, a good way to do it is to follow the greats, and Buffet is a great! One of the key pieces of information that Warren Buffet has given with regard to strategy is to buy in times of fear and sell in times of greed. Essentially, when investors are selling off, it’s time to buy while the stock is low and when investors are buying, it’s time to sell when the stock is high. If you’re following these tips, right now is definitely the time to buy SUNE. Unfortunately, fear has taken control of the stock.
Beyond Fear & Greed
Fear and greed are great indications of when to buy and sell, but in my opinion, it goes far beyond that. In this particular case, it’s important to take a look at the fundamental factors. Here’s how I see it:
- Fundamental Buying Signs – In the case of SUNE, there are several reasons to be excited about the stock. SunEdison is a company that focuses on solar power, and let’s face it, solar is the new black! Recently, Paris struck a climate change deal with 195 countries, all of whom have agreed to work on reducing greenhouse emissions. To do so, these countries are going to need to reduce their reliance on fossil fuels and focus heavily on generating renewable energy, the type of energy that SUNE is known for. In addition, the 30% tax credit from the US government that was supposed to expire in 2016 is now extending far beyond 2016, breathing more life into demand for solar power and other renewable energy systems. Ultimately, demand for SUNE products is on the rise.
- Fundamental Selling Signs – There is one issue that SUNE is facing. Unfortunately, they are being taken to court for misleading investors. I know, that sounds bad, but don’t let the fear hit you just yet. The suit against SunEdison revolves around the idea that through aggressive acquisitions, SUNE has painted a much more grim financial picture than they have led investors to believe was happening. Now, I disagree entirely with this. While it’s the reason investors are selling the stock at the moment, it’s also unwarranted. The reality is that SUNE has been pretty aggressive with acquisitions. However, it’s those acquisitions that are likely to be the driving force behind the incredible profitability we’re going to see from the company in the future.
Is Now The Time To Buy Or Sell SUNE?
I understand the concerns. However, when investing, fear can lead to missed opportunities. At the moment, SUNE is primed for long term gains, and thanks to the overwhelming fear in the market, it’s possible to get in on those gains at a low cost. As the lawsuit blows over, those who sold the stock are likely to be disappointed in themselves when they realize the growth that’s coming down the road.
What Do You Think?
Where do you think SUNE is headed and why? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]
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