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Ahknaten -- Queasy LDK
Rating: 2.00 (1 votes)
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LDK is a strange company to analyze. In the past year the stock has fluctuated from $20 to $77 and the volatility alone has been quite remarkable. When I made a valuation model in eVal, I found a price target for LDK of $44, but that assumed that the company could keep growing at least 38% for each of the next 5 years. Is that reasonable? If I dropped the sales growth to 10% in the 3rd year, I got a price target of $22. Is that reasonable? In some manner the company has a low PE and an alright price/book, but from another angle, I get concerned with the price/cash flow and high accruals. The accruals play a role in providing a high f-score to the LDK stock. In my virtual funds, I have gone neither long, nor short on it. I really think there are much better information technology/semiconductor plays out there. Note -- I haven't even mentioned the word 'solar' yet. This past week at the University of Dayton they had a RISE conference, and quite a few economists/strategists were bullish about alternative energy - and although some like the solar story, I'm not confident yet at entering that particular boat. This stock makes me feel a bit queasy, and for that reason, I'm going to say 'short' to LDK. Pick something else, this stock seems more like a 'gamble' to me. | ||
