LDK hit with a lawsuit

[aiki14]

These guys got hit with a lawsuit after the former comptroller said they had overstated their inventory. A downgrade by Goldman followed and the stock dropped precipitously.
Here's my case for a buy on it,
1) The sector is enfuego and buoyed by the oil prices as well as the general "greening" of the political landscape.
2) Mr Peng the CEO and founder is the 6th richest guy in China and quite the dynamic individual, his ventures are successful and he is throwing his full weight into defending against the accusations.
3)LDK has hired an independent outside auditor to accurately report the inventories. This is an unusual step for a chinese company.
4) The company has large and ongoing relationships worldwide to obtain raw materials and provide finished product.
5) The stock price dropped 50% from it's high. I feel this is unjustified even if the allegations are completely true. A retracement halfway back to the high would still net 25% from current levels.

As always do your own research, and post back here if I have overlooked or misstated anything. I am a buyer this morning.

[englishman26]

I was reading a bit about this after you mentioned it yesterday. Purely technically today I was waiting for it confirm it's move from yesterday which it hasn't really done.

Do you know anything about the timeframe of a) the audit, b) the lawsuit?

[aiki14]

I was reading a bit about this after you mentioned it yesterday. Purely technically today I was waiting for it confirm it's move from yesterday which it hasn't really done.

Do you know anything about the timeframe of a) the audit, b) the lawsuit?

Audit is happening now, when it gets done is anybodies guess, lawsuit is much more difficult to predict, and considering I just said the audit is anybodies guess, you know what that means.

[chinaman711]

LDK nice trade today as solar stocks are heating up again. FSLR wow, DSTI almost made it to 6 before pulling back. Looking for more tomorrow. Good luck

[microhedge]

With the heat, was waiting for ASTI to follow suit but seemed to sell off instead.

Breaking my rules today, I added to ASTIZ 3 times on the way down... FSLRs performance spurred me to this.

Yes, i may be delusional but I think ASTI has more to give at an attractive price point in this hot sector. When some get out of reach, the attention turns to the affordable ones... DSTI, ASTI (their warrants), ESLR and ENER... my attention will be focused here as FSLR reaches for the moon.

I think this herd mentality is responsible for DSTIs jump on no news.

We'll see.

[Thierry Martin]

2008

[microhedge]

hmmmm yummy

[MonkeyBrains]

I got in today on LDK for no other reason than aiki said he had some. Maybe not the brightest trading strategy but I don't know crap about crap. So I figure with all the crap you guys sound like you know, it might just be worth something after all. I do wonder though, I traded a lot when I was younger. I didn't know anything. I did very well. (uhhhh, until I lost it all) And it seems like the more I read, research, and learn the worse picks I make. I fall "in love" with the wrong companies. So I think this time around I'm gonna do the 'dumb girl' thing and ride the band waggon with some of your picks.

No pressure.8)

[Bman409]

With the heat, was waiting for ASTI to follow suit but seemed to sell off instead.

Breaking my rules today, I added to ASTIZ 3 times on the way down... FSLRs performance spurred me to this.

Yes, i may be delusional but I think ASTI has more to give at an attractive price point in this hot sector. When some get out of reach, the attention turns to the affordable ones... DSTI, ASTI (their warrants), ESLR and ENER... my attention will be focused here as FSLR reaches for the moon.

I think this herd mentality is responsible for DSTIs jump on no news.

We'll see.


I like ENER... maybe SOLF too.. but not so much the others.. They may keep running but I like to buy after a consolidation pattern forms.

[aiki14]

I got in today on LDK for no other reason than aiki said he had some. Maybe not the brightest trading strategy but I don't know crap about crap. So I figure with all the crap you guys sound like you know, it might just be worth something after all. I do wonder though, I traded a lot when I was younger. I didn't know anything. I did very well. (uhhhh, until I lost it all) And it seems like the more I read, research, and learn the worse picks I make. I fall "in love" with the wrong companies. So I think this time around I'm gonna do the 'dumb girl' thing and ride the band waggon with some of your picks.

No pressure.8)

Pressure makes Diamonds

I set a 5% stop on this which for me is 38.57. I would advise you to do the same or similar. I normally set 8% as an absolute stop on everything but with the lack of track record on this I think it's prudent to tighten things up.
If you're trading this, I would begin taking some profits at +10% which is 44.66 for me. You could consider a little schnitzel at 5% and lock in to get your expenses and fees covered as well.
I would not advise averaging down on this, again because of the lack of history and the potential for negative news dramatically affecting the price. Note also that any positive news will also dramatically affect the price in a positive way.
I am not going to be around most of the morning so i'll have my outs programmed. If you can't be around to do it yourself I would advise you to do the same.
A lot of advice but it's your money to do with what you will. I will be rooting for you (real altruistic ain't I, since I own the stock too).
Good Luck

One more thing, if this is widows and orphans money, sell out as soon as the market opens and seriously consider a few good mutual funds. If I lost the entire amount in ALL my trades it would not materially affect my lifestyle. I never allow my trading to represent more than 15% of my investable assets, I am 46 and have 2 kids about to begin college (sent the application to Dartmouth yesterday for the oldest) so risking 15% is all I can tolerate. Set your tolerance to a level that makes sense to you and stick to it.

[MonkeyBrains]

Well besides the fact that I'm a widowed orphan with no money in mutual funds, I'm listening. I got out this morn on LDK. To steep of a fall for this chicken. I feel better already. I have about 40% of my savings to play with here. I am 28 with 3 kids (8 year old boy and 6 year old boy/girl twins) So I figure that I have plenty of time for ups and downs. Financially, we're all comfortable. Business has been getting a little better each year. So that settles my nerves too.

Since I have been back in I haven't lost much because I set 5% stop losses on all my stocks. Pretty chicken, I know.

Thanks for all your help and advise. I'm sure you help a lot of us out here to do better. And good luck with Dartmouth!

[TYLER]

Bought in at 36.68

[Exousia]

This actually looks very promising... I may have to buy in once my first money transfer to my Scottrade account goes through tomorrow :)

[BuyOnDips]

Here's an article on what's going on with LDK:

http://seekingalpha.com/article/50737-ldk-solar-the-pros-the-cons-the-recap


Personally, I'm staying away from all Chinese stocks for now. I'll sleep much better.

[englishman26]

For me, this has yet to confirm the buy signal from 3 days ago and today pretty signalled sell therefore killed it.

A second upside day is a pretty easy and relatively safe strategy to stick by, I think.

[aiki14]

For me, this has yet to confirm the buy signal from 3 days ago and today pretty signalled sell therefore killed it.

A second upside day is a pretty easy and relatively safe strategy to stick by, I think.

Yep, I was totally wrong on this one. Every lesson i learn comes with pain. Todays was cockiness. Probably happen again. Hopefully not soon.

[netwrangler]

Yep, I was totally wrong on this one. Every lesson i learn comes with pain. Todays was cockiness. Probably happen again. Hopefully not soon.I've been wrong before. I'll be wrong again. So what's a Mother to do?

Rock on!

[englishman26]

Yep, I was totally wrong on this one. Every lesson i learn comes with pain. Todays was cockiness. Probably happen again. Hopefully not soon.

Ya win some, ya lose sum - that's how it goes!

[optimus25]

Aiki, you might want to look up the Barron's article about the company a couple of weeks back. There's some fishy stuff going on with the company based on the article.

I think the opportunity is there on a technical basis but I'm a little more cautious until the bad news overhanging the stock subsides...though by then, the stock would have already runup...

BTW have you checked out EJ - Chinese real estate play. I've mentioned it a couple of times and was fortunate enough to get some shares at $25.50

[TYLER]

up 8.45% today, thank you aiki14!