Should You Buy ReneSola Ltd (SOL)?
ReneSola Ltd (NYSE:SOL), a semiconductors and semiconductor equipment company based in China, saw a significant share price rise of over 20% in the past couple of months on the NYSE. Less covered, small-stocks like SOL sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could SOL still be trading at a low price relative to its actual value? Let’s take a look at SOL’s outlook and value based on the most recent financial data to see if the opportunity still exists. View our latest analysis for ReneSola
What is SOL worth?
According to my valuation model, the stock is currently overvalued by about 31%, trading at $3.3 compared to my intrinsic value of $2.51. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that SOL’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of SOL look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at SOL future expectations. In the upcoming year, SOL’s earnings are expected to increase by 75.08%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in SOL’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe SOL should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on SOL for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for SOL, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on ReneSola. You can find everything you need to know about SOL in the latest infographic research report. If you are no longer interested in ReneSola, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
