From The Street, Jan 24
RECOMMENDATION
We rate SOLAR3D INC (SLTD) a SELL. This is driven by a number of negative factors, which we believe should
have a greater impact than any strengths, and could make it more difficult for investors to achieve positive
results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas,
such as its weak operating cash flow, poor profit margins and generally disappointing historical performance
in the stock itself.
HIGHLIGHTS
Net operating cash flow has significantly decreased to -$0.05 million or 159.21% when compared to the same
quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
The gross profit margin for SOLAR3D INC is currently lower than what is desirable, coming in at 27.01%. SLTD
has continued with the weak profit margin when compared to the same quarter of last year. Despite the
mixed results of the gross profit margin, SLTD's net profit margin of 7.11% is significantly lower than the
industry average.
SLTD's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the
net result is that it is down by 41.86%, which is also worse that the performance of the S&P 500 Index.
Investors have so far failed to pay much attention to the earnings improvements the company has managed
to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor.
However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper
(in proportion to its earnings over the past year) than most other stocks in its industry. But due to other
concerns, we feel the stock is still not a good buy right now.
SOLAR3D INC reported significant earnings per share improvement in the most recent quarter compared to
the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it
is poised for EPS growth in the coming year. During the past fiscal year, SOLAR3D INC reported poor results
of -$2.08 versus -$0.52 in the prior year. This year, the market expects an improvement in earnings (-$0.03
versus -$2.08).
Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall
market, SOLAR3D INC's return on equity significantly trails that of both the industry average and the S&P 500.
