Meanwhile, Merrill Lynch Friday took another swipe at this issue. They looked not at debt-heavy companies, but instead those with large cash positions.
Merrill did one other useful list, screening for companies which generated a considerable amount of their pre-tax income from interest income. If short-term rates come down in 2008, as many expect, they could see risks to their near-term earnings. Merrill actually found 14 companies which generated more than 100% of their last 12 months earnings before taxes from interest income: Electronic Arts (ERTS), 316.2% BladeLogic (BLOG), 234.5% Nortel (NT), 178.4% **Sunpower (SPWR), 170.7% ******************* Motorola (MOT), 153.3% Celestica (CLS), 123.5%
As on of the comment goes "This is interesting, because it's a kind of "reverse value stock" approach -- avoid companies with high cash-per-share. The logic is that if cash accounts for most of the company's earnings, it shows that there isn't much of a real business there other than the cash" - partly applicable to SPWR
SunPower�s forward PE is also astronomical (126 based on the high range of their forecast of GAAP earnings between $0.85 and $1.00 in 2008).
The gross profit margin for SUNPOWER CORP is rather low; currently it is at 22.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.60% trails that of the industry average.
Net operating cash flow has significantly decreased to -$13.91 million or 309.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
SUNPOWER CORP's gross profit margin for the third quarter of its fiscal year 2007 has significantly decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line.