Why SunEdison Inc. Shares Soared Today
What: Shares of SunEdison jumped more than 10% early Wednesday after the company announced the closing of a new financing arrangement with Deutsche Bank to construct a 56-megawatt portfolio of four utility-scale solar projects in the United Kingdom.
So what: Though this notably marks SunEdison's first foray into what it describes as "the rapidly growing UK solar market," the company also announced that U.K.-based Foresight Solar Fund plans to acquire the entire portfolio of projects through a share purchase agreement once interconnected. Energy produced from the projects will be purchased from SunEdison by U.K.-based SmartestEnergy.
Now what: SunEdison President of EMEA and Latin America Jose Perez weighed in on the deal in a press release: "We are entering the UK solar market with a project portfolio while expanding our relationship with Deutsche Bank, this demonstrates our ability to utilize existing relationships to enter new markets and facilitate the expansion of our utility business without impacting our balance sheet."
That's a great thing since SunEdison isn't profitable on a trailing 12-month basis.
In the end, though, while the stock still looks admittedly expensive trading around 42 times next year's expected earnings, I think investors are right to celebrate today's announcement considering the U.K. has declared its intention to deploy more than 20 gigawatts of solar energy over the next six years. If SunEdison can grab a meaningful slice of that big pie, it should be able to handsomely reward patient shareholders down the road.
Speaking of massive growth...
Sunedison may be able to expand nicely in the U.K., but that hardly means its the only promising growth stock out there.
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980's, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in late 1990's, when they were nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play", and then watch as it grows in EXPLOSIVE lock-step with it's industry. Our expert team of equity analysts has identified 1 stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.
The article Why SunEdison Inc. Shares Soared Today originally appeared on Fool.com.
Steve Symington 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.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
