Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, solar wafer maker LDK Solar (NYSE: LDK) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at LDK, and see what CAPS investors are saying about the stock right now.
LDK facts
|
|
Headquarters (founded) |
Xinyu City, China (2005) |
Market Cap |
$266.8 million |
Industry |
Semiconductors |
Trailing-12-Month Revenue |
$767.1 million |
Management |
Founder/CEO Xiaofeng Peng President/CEO Xingxue Tong |
Return on Capital (average, past 3 years) |
(1.4%) |
Cash/Debt |
$174.1 million / $2.9 billion |
Competitors |
SunEdison Yingli Green Energy |
On CAPS, 12% of the 1,508 members who have rated LDK believe the stock will underperform the S&P 500 going forward.
Just yesterday, one of those bears, fellow Fool Simon Erickson (TMFInnovator), succinctly summed up the underperform case for our community:
Another failed solar company that is about to go belly up.
LDK got too aggressive in taking out debt right before the downtown (2007-2008). Their revenues have fallen by 70% since then and margins have turned sharply lower. Take note that last year, LDK's net loss more than 10% greater than its TOTAL revenue. That's bad news here, folks.
Subsidies are drying up, and costs per MW are still moving lower. I'm still bullish on concentrated solar as a potential low-cost, regional power source. But solar PV companies (LDK included) are really going to have it rough for the next few years.TMFFlushDraw wrote a great piece about what it would take for solar companies to get back to profitability.
For LDK, 28% gross margins just aren't going to happen. It's only a matter of time until the lenders demand their money back and the music stops playing.