Canadian Solar's cash conversion is less than ideal, impacting its earnings view. Its true earnings power may be less than its statutory profit. However, its EPS growth has been impressive. There are 2 warning signs in the company's performance.
Canadian Solar's declining ROCE and rising capital employed are atypical for multi-baggers. Its total return to shareholders has been flat over the past five years. The company's efforts to reduce liabilities may be tied to the ROCE decrease.