According to a new filing with the SEC, Steve Cohen‘s Point72 Asset Management has acquired some 13.74 million shares of Sunedison Inc (NYSE:SUNE), to take the firm’s total stake to 15.95 million shares, which represent 5.1% of the company’s outstanding stock.
Steve Cohen re-branded his former hedge fund, SAC Capital, into a family office for himself and his employees after SAC ran into trouble involving insider trading, which were later settled. At the end of June the market value of Point 72’s equity portfolio stood at $14.44 billion, down from $14.67 billion at the end of March. The consumer discretionary and energy sectors amassed the largest parts of the portfolio, of 22% and 21% respectively.
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Point72 initiated a stake in Sunedison Inc (NYSE:SUNE) during the third quarter last year, when it held 20,000 shares and the latest move has been the largest increase so far. Sunedison Inc (NYSE:SUNE)’s stock has cratered by more than 46% mainly falling since the beginning of August on the back of financial results that disappointed investors. Solar stocks have generally received a harsh treatment lately owing to two main reasons. Firstly, it’s the slumping oil price, which although has little to do with these companies, but investors believe this will lead to a dampening demand for clean energy products. Secondly, the impending interest rate hike means that investors would demand more return from the debt ridden companies like Sunedison Inc (NYSE:SUNE) (debt-to-equity ratio stands tall at 16.97), because that is how the company have been financing its projects. This would not only lead to a slump in profits, but it could also get more difficult to attract funds for these projects.
However, there are signs that the company’s fate is about to change despite a massive fall in the net income for the second quarter on a year-over-year basis. JP Morgan recently initiated coverage on Sunedison Inc (NYSE:SUNE) with an ‘Overweight’ rating and a price target of $24, which represents a 135% premium based on the current price. The analysts believe that there are many long-term growth opportunities for the company going forward. Moreover, there have been some notable insider purchases, including CEO Ahmad Chatlia, who acquired some 9,700 shares on Friday taking his total stake to 845,672 shares.
Hedge fund sentiment surrounding Sunedison Inc (NYSE:SUNE) has remained almost constant during the second quarter. Among over 700 funds that we track, 93 held long positions with an aggregate value of $5.68 billion in the company, as compared to 94 funds with $4.44 billion at the end of March. The rise in total investment came on the heels of a 25% surge in stock price during the second quarter. However, it’s important to point out that investors we follow hold nearly 70% of its outstanding stock. Among them, David Einhorn’s Greenlight Capital and Dan Loeb’s Third Point are the two largest shareholders of Sunedison Inc (NYSE:SUNE) within our database holding 24.84 million shares, valued at $743.10 million, and 12.40 million shares valued at $370.88 million respectively.
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