Why ReneSola Is Poised to Underperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, solar wafer manufacturer ReneSola (NYSE: SOL  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at ReneSola and see what CAPS investors are saying about the stock right now.

ReneSola facts

Headquarters (Founded)

Jiashan, China (2003)

Market Cap

$201.3 million

Industry

Semiconductors

Trailing-12-Month Revenue

$850.4 million

Management

CEO Xianshou Li (since 2005)
CFO Henry Wang (since 2011)

Return on Equity (Average, Past 3 Years)

0.1%

Cash/Debt

$265.4 million / $961.9 million

Competitors

LDK Solar (NASDAQOTH: LDKSY  )
Suntech Power Holdings
(NASDAQOTH: STPFQ  )
Yingli Green Energy
(NYSE: YGE  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 5% of the 1,160 members who have rated ReneSola believe the stock will underperform the S&P 500 going forward.

About a month ago, one of those Fools, chrispycrunch, succinctly summed up the ReneSola bear case for our community:

The solar energy sector is in a deep decline. ... Supply remains grossly in excess.

Demand will not be at levels reached in 2008-2010 when government stimulus programs, feed-in-tariffs were applied worldwide.

China's excess supply could be exasperated by the government providing support to domestic solar energy suppliers, which keeps supply at current or at increasing levels.

The balance sheet of RenaSola will be strained further by these macro headwinds.

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