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Why ReneSola (SOL) Stock Is Up Today

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By on Consumer Staples

Under an agreement signed with China Seven Star, ReneSola (SOL) has gained 4.6% reaching $2.62. ReneSola (SOL) has agreed to sell new and current solar projects of at least 200 MW which include four completed Bulgarian solar parks within the next 18 months. An MOU signed by both organizations indicates that China Seven Star will purchase two completed 9.7 MW solar projects from ReneSola (SOL) in Bulgaria.

According to the TheStreet Ratings team, RENESOLA LTD (SOL) has been ranked as a Sell and has a D ratings score because there are some concerns which will probably have a bigger effect than their strengths. This may make it harder to attain a positive outcome for investors when compared to most stocks covered by TheStreet Ratings team. The company has weaknesses that include weak operating cash flow, high debt management, poor profit margins and a disappointing return on equity, along with a rather sub-standard stock performance.

TheStreet Ratings Team analysis has brought forward the following points:

  • The 5.47 debt-to-equity ratio is higher than that of the industry average indicating there may be a bigger risk linked with the company’s debt level management. In addition, a 0.32 quick ratio is maintained by the company indicating it does not have the ability to meet short-term cash requirements.
  • As compared to the ROE from same period of the year before, there is a big decrease in RENESOLA LTD (SOL)’s return to equity which shows the company has a significant weakness. The return on equity is considerably lower than the S&P 500 and industry average in comparison to other Semiconductors & Semiconductor Equipment corporations and the market overall.
  • There is a notable -$112.25 million or 2761.28% decrease in the net operating cash flow in comparison to the same period the previous year, indicating a lower growth rate as compared to industry average.
  • RENESOLA LTD (SOL) has a low gross profit margin of 17.47%, which is higher when compared to the same quarter the year before. Even with these mixed results, SOL has a -3.51% net profit which signifies underperformance in comparison to industry average.
  • When compared to the prior year, the stock share price of SOL has shown poor performance and shows a 27.62% decrease which is poorer than the S&P 500 Index’s performance. Although there is an improvement in company earnings during the previous quarter, investors are not paying much attention. Certainly, the market’s overall trend will prove to be a major factor. In one way, last year’s sharp drop of stocks may prove beneficial to investors in the future and make them cheaper to most of the other stocks within the industry as compared to last year’s earnings. Consequently, it’s still not a good time to buy the stock.

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