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Dark Clouds Gather as LDK Readies Earnings Report

To begin, Europe announced import tariffs of 11.8% , which the market took as favorable news. LDK, JinkoSolar (JKS), ReneSola (SOL), Yingli Green Energy (YGE) and First Solar (FSLR) either opened higher or traded higher during Thursday's trading session.


It appears LDK sellers took advantage of the pop in share price and sold into the news. LDK closed at $1.40 Thursday, just slightly above its $1.37 low point on the day. Shareholders have not been rewarded for their patience; the stock has fallen 15% in the last year, and the average analyst target price is $1.10.

I can't think of a good reason to buy this stock. However, for investors who don't mind playing the Wall Street "Lotto," LDK can be treated like a stock option.

In LDK's case, you're not losing time premium from an upcoming expiration date, but the negative cash flow that may lead to bankruptcy acts nearly the same. In a nutshell, LDK is in a race against the clock to reverse its losses.

Invest accordingly.

52-Week Range: 71 cents to $2.36

Book Value: -$3.05

LDK Revenue Quarterly ChartLDK Revenue Quarterly data by YCharts

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Stock quotes in this article: LDK, FSLR, YGE, JKD, SOL 
Robert Weinstein currently blogs, mentors traders, and writes several weekly columns in Rocco Pendola's Option Investing newsletter from his home in northern Wisconsin. Robert tends to focus on the psychological importance of goals, risk mitigation, emotion, and relatively short term market exposure. With nearly 30 years of studying and investing experience, Robert has experienced the many ups and downs in the financial markets and uses the knowledge gained to maintain balance. Robert believes the best way to make money investing is to avoid losing it. The best way to avoid losing is to know what emotional traps lay in the path of investors and learning how to avoid them. Robert is a voracious reader of financial related books often completing more than one book a week while not trading or writing. Robert contributes to his blog at paid2trade.com on a regular basis with an emphasis on studying behavior finance.


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