Comments on Fund My Mutual Fund: LDK Solar (LDK) - Good Earnings but Worrying Margi...

Pickard,I dont think margins should be a low prior...

2008-05-13T10:29:00.000-04:00

Pickard,

I dont think margins should be a low priority. While I agree the plant will lead to substantial margin improvement, until it comes online they face pressure, and I believe the stock will. Could lead to stagnation in the stock (range bound) for a while. LDK is probably now more of a 2009 story ... my gut says when people on the inside see the plant is firming up and looking like all systems go the stock will move ahead of that - so the stock will tell us when things improve.

As margins (near term) degrade they need more revenue just to stay flat which is a drag on earnings. That said, upper 20s is still good for the sector, but what I did not like was they gave us 1 set of numbers not 90 days ago and have already retracted that set of numbers. Sort of like what Suntech Power did. I don't like when companies don't stick to their words, I lose visibility.

yayankee, at the LDK Call today, they specified th...

2008-05-13T01:15:00.000-04:00

yayankee, at the LDK Call today, they specified that there was no damage from the quake. It was far away.

As for LDK, I respectfully suggest that you put margins at the appropriate level of priority, which is quite low. The poly plant plan is the critical part of the future margin equation. As long as they don't stumble on the implementation of that plan, or run out of money before it comes online, it's mostly irrelevant how much profit they're actually making at this time (keep in mind, though that they are in fact making a very respectable margin, and their Revenues and Profits are large, and growing fast.

We have to wonder if the earthquake in China today...

2008-05-12T17:48:00.000-04:00

We have to wonder if the earthquake in China today had an impact on any of the Chinese Solar companies.