Ticker Shock: Three Reasons LDK Solar's Future Looks Cloudy
Thursday's top stories and stocks with potential to move.
Asian stocks rose overnight. The Hang Seng and the Nikkei were up 2.08% and 0.79%, respectively. European stocks were in positive territory earlier this morning, too. And here in the US, we're currently trading lower.
Here's what I'm seeing this morning:
LDK Solar (LDK):
The China-based company put up a good-size loss in its second quarter.
But that's not really the big story.
I think a lot of folks are going to be paying more attention to the outlook it offered up for the third quarter. More specifically, in the release it said it's looking for $240 to $270 million in revenue. Though I'd clearly love to haul that kind of coin home, the problem is the Street is at a smidge more than $290 million.
Here are some other things I'm thinking about:
1. The hefty red ink it expected to put up this year isn't too sexy. And even if it hits the current EPS estimate for 2010 ($0.76), that's not all that impressive for a stock that trades north of $11. What's the big catalyst here?
2. I don't see the investment community getting excited about alternative-energy companies any time soon.
3. At this point, the company is going to have to put together a number of better-than-expected quarters if it wants to win back the hearts and minds of retail and institutional investors.
Bank of America (BAC):
CNBC reported that per a filing, Paulson & Co. -- which has a pretty good reputation, I might add -- picked up a bunch of stock and owns more than $2 billion worth of shares.
This is actually big news because it means this smart money man is now a pretty big shareholder. Does he know something that perhaps the rest of us don't?
1. I can't get into John Paulson's head, but I certainly don't think he'd have plunked down that type of flash unless he thought he was going to eventually "put some jingle in his jeans" (to steal a line from Toddo). But I don't know how long of an investment horizon the firm has. The good news is that I sense he'll be nudging management and the board to uncover ways to give the stock price a goose.
2. While I suspect many will be paying attention to this news this morning, I think the stock is ahead of itself at this point and I'm reluctant to hop on or chase.
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