Stock Selection

Davide Vioto - MSGF

STOCK SELECTIONGLOBAL FINANCIAL MARKETS

Professor Yee Seng Cheah, Michael

Davide Vioto - MSGF

BRIEFLY ON THE COMPANY

• SunEdison, Inc. was founded in 1984 and is headquartered

in Maryland Heights, Missouri.

• It develops, manufactures, and sells silicon wafers to the

semiconductor industry.

• The company operates through three segments: Solar

Energy, TerraForm Power, and Semiconductor Materials.

Sector Technology

Industry Semiconductor -

Integrated Circuits

Source: finance.yahoo.com

Davide Vioto - MSGF

PRICE HISTORICAL TREND


The stock price of SunEdison Inc went up 65.55% over the last 200

days. On a technical level the stock has a Exponential Moving

Average (EMA) of 29.12, this puts the price of the stock at +2,33%

away from that average. This distance is been also around 20% in

particular moments.

Davide Vioto - MSGF

KEY STATISTICS


• We can compare the key statistics of SUNE with the Industry:

SUNE Industry

Qtrly Rev Growth -0.05 0.15

Gross Margin 0.09 0.44

EBITDA -80.10M 17.23M

Operating Margin -0.19 0.04

Net Income -836.60M N/A

EPS -3.48 0.22

P/E N/A 31.05

PEG (5 yr expected) -6.19 0.90

P/S 3.32 2.62

Davide Vioto - MSGF

KEY STATISTICS


• The company is underperforming compared to the

(Semiconductor - Integrated Circuits) Industry.

• The main statistics are: its negative EPS and PEG, against

positive value for both in the Industry; its negative EBITDA

and Operating Margin (both positive in the Industry).

• Because of the negative EPS, it is not possible to compute

SUNE’s P/E to compare with the Industry.

• SUNE has a Beta of 3.96; It means a higher volatility

compared to the reference index (NASDAQ).

• SUNE is underperforming compare to the Sector as well.

Davide Vioto - MSGFSource: thestreet.com

• No significant bullish trends noted in growth and profitability from

income statement analysis.

• Revenue has declined at an average rate of 3.3% over the last 3 years.

• SunEdison reported a loss of 115.2% in 2015-Q1.

• Current Operating margin (or operating profit margin) of -67.2% has

fallen by 52.9% over last year's Q1 and it is 50.9% lower than the 3 year

average operating margin.

• SUNE stock has a high debt of 9161 million with D/E ratio of 6.3.

• It has a negative ROE of 96.7% and a negative Free Cash flow margin

of 114.6%.

• SUNE stock is trading at a price to sales ratio (PS ratio) of 3.32 against

the industry average (Electronics-Semiconductors) of 2.62.

KEY STATISTICS

Davide Vioto - MSGFSource: finance.yahoo.com

SUNE INVESTMENT STRATEGY

• All the aspects analysed in the previous slides reccommend a short-

position on SUNE.

• In the last 3 month the Price of SUNE is swung, assuming the

minimum value at 27.97 and the maximum value at 32.25.

• The short-position needs to be opened with a selling-price not below

29.91.

• I decided to fix the stop loss up 12% the price of 29.91; because the

fluctuation of SUNE price never exceeded 32.25. If the price will

exceed 33.50 the position needs to be closed with a loss of -3.95.

• The buying-price to cover the short-position should be down 14% the

price of 29.91. If the price of SUNE will decrease downside of 25.72

the position needs to be close ensuring a gain of 4.18 per stock.

THANK YOU

FOR YOUR ATTENTION!Davide Vioto | MSGF

[email protected]

linkedin.com/pub/davide-vioto/b9/31a/4a2

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