Sunedison (SUNE) Stock: Fear, Greed & Gains

Sunedison Inc (NYSE: SUNE)

Sunedison has been having a hard time in the market as of late. Unfortunately, last week the company was faced with a lawsuit stating that SUNE misled investors. However, I don’t believe that this is truly the case. Nonetheless, the suit has caused the stock to decline, and in my opinion, this is creating an incredible opportunity for investors. Today, we’ll take a look at the details of the suit, discuss why I don’t believe SUNE is in the wrong and talk about what we can expect to see from the stock moving forward.

SUNE Gets Sued For Misleading Investors

Last week, Sunedison was served a lawsuit that claimed that the company misled investors. The lawsuit is a class action suit that was filed by Robbins Arroyo LLP. The suit states that Sunedison essentially misled investors by issuing several quarterly statements throughout 2014 and 2015 showing increases in net sales and explaining that Sunedison was in a great position for growth. The firm that is suing SUNE states that these statements were misleading because the company was planning on acquisitions that would cost the company vast amounts of money. As a result of the high cost of the acquisitions, SUNE posted losses and eventually laid off 15% of its employees. Here’s why I don’t believe SUNE was in the wrong here…

  • Statements Were Not Misleading – During the quarters for which the quarterly statements in question were released, SUNE did incredibly well. Sales were climbing and financial data was overwhelmingly positive. There was not one misleading statement or lie in any of these quarterly statements.
  • Acquisitions Are Good For Investors – The basis of the argument here is that the acquisitions put Sunedison in a poor financial position. I simply don’t agree. While Sunedison did spend quite a bit of money when acquiring other companies, these acquisitions were smart moves that will likely prove to be incredibly profitable in the long run. Some times you have to spend money to make money, and SUNE knows this!

The bottom line here is that Sunedison has done nothing wrong.

Why SUNE Is Likely To Climb Moving Forward

While the lawsuit may be causing the stock to decline at the moment, this isn’t going to last forever. In fact, I believe that the declines we’ve seen on SUNE recently are simply opening the door to an incredible opportunity. The truth is that Sunedison is a great company that’s involved in a growing industry. Ultimately, the world is moving toward renewable energy sources, and Sunedison is on the front line of those trends. In fact, we’ve recently seen two big stories that show that governments are getting involved in the push to renewable energy…

  • Tax Credit Extension – For quite some time, the United States has offered a 30% tax credit to businesses and consumers that installed renewable energy systems in their homes or offices. However, that tax credit was supposed to come to an end in 2016. Recently, we learned that this tax credit has been extended and will last far longer than 2016. Ultimately, this will increase demand for renewable energy systems, leading to higher sales volume for SUNE.
  • Paris Climate Deal – Recently, it was announced that Paris has met a climate change deal through which 195 countries have agreed to reduce greenhouse gas emissions. One of the best ways to do this is to use renewable energy systems. As a result we can expect to see even more demand for SUNE products.

The reality is that although SUNE is down thanks to the lawsuit, the stock is likely to rise. There’s a renewed interest in renewable energy and this is likely to lead to climbing sales. Also, with all of the acquisitions that have taken place, SUNE is primed to take a large market share of the industry. All in all, things are looking great for the stock.

What Do You Think?

Where do you think SUNE is headed and why? Let us know your opinion in the comments below!