What: Shares of renewable energy company SunEdison Inc (NASDAQOTH:SUNEQ) jumped 18% late in trading Tuesday as investors tried to find a silver lining in the stock.
So what: Despite the fact that Axiom Capital and Bank of America/Merrill Lynch both put out negative analyst notes about the stock, the market is looking to the positive.
Reuters reported today that hedge funds Visium Asset Management and Sand Grove Capital Management both disclosed stakes in the company of 1.3 million shares and 272,000 shares, respectively. Adage Capital Partners added 9.2 million shares to its stake, which totaled 17 million at year-end.
While hedge fund ownership can sometimes be a bullish sign for a stock, keep in mind that SunEdison is down 68% in 2016, even after today's bounce. If each of these funds held onto their positions until now, they've each lost millions in value in SunEdison.
Now what: Renewable energy stocks in general are up big today, partly because Russia and Saudi Arabia agreed to "freeze," which could eventually lead to rising oil prices. This gave the market, and particularly energy stocks, a reason to cheer today, and with SunEdison's volatility, it's not surprising the stock is up.
Long term, the company has financial problems that go far beyond what a bullish hedge fund or two can fix. Even though the stock popped today, the future still looks dim, just like the long-term price chart for SunEdison stock.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.