Why Shares of SunEdison Inc. Dropped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of SunEdison  (NYSE: SUNE  ) dropped as much as 11.1% today after the solar project builder announced it was dropping a project.

So what: SunEdison said it is abandoning a 20 MW project it won in February in India because the job is no longer financially viable. Rules about local manufacturing of panels have resulted in rising prices, and those higher costs make the project unprofitable. The move will cost the company a $333,000 bidding deposit.  

Now what: A 30 MW project that SunEdison won will be built, but it appears that costs for 375 MW worth of projects won at auction in February could be under scrutiny. I'd expect to see slightly higher prices for panels this year as the industry recovers, but India's prices will be exaggerated because of local sourcing rules. This is a negative for SunEdison today, but only incrementally, and I'd view the industry-wide sell-off as a buying opportunity.

3 stock picks to ride America's energy bonanza
Solar power isn't the only growing energy source in the U.S. Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2905933, ~/Articles/ArticleHandler.aspx, 10/24/2014 11:07:01 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement