Based on earnings and projections, the stocks are priced somewhat similarly. But I dont see how SOL can keep the momentum going beyond 2008. LDK has a roadmap that looks promising, whereas SOL at its current valuation is just another solar stock riding the wave. SOL is not nearly aggressive enough with their roadmap.
But since there is relatively no short interest with SOL, I can see it surpassing LDK within the next couple weeks. I'll laugh when that happens. That's the thing with these stocks, there is no limit to the power of hype. This stock could go "all the way" just like FSLR did. PE of 100+ is possible I guess. But I certainly wouldnt gamble on that.
There is no rational reason why this stock should ever sell for more than 80% of what a share of LDK sells for. But it is awfully hard to factor in short interest. The amount of downside pressure on LDK is really quite difficult to quantify in dollar terms. My guess is that LDK would be trading at about $70 if not for the short interest and small float. (Float is 106 million minus Peng's shares.) And that places SOL at about $50. That is assuming SOL will expand to about $1.5 bln revenue in 2009. There is no indication that they are even trying for that much. But it is of course all about exceeding expectations. If YOU think that they will do $1.5 bln in 2009, then this stock may be worth $50 sometime this year.
Personally I would not hold this past $25, unless the whole sector bubbles up with it. That is where I valued it back when this stock was selling for $18.
07:47 STP Suntech Power: CEO interviewed on Bloomberg TV (48.08 )
Says they have never been stronger; says they will continue to drive costs as low as possible; says silicon remains the major issue but expects costs to come down 20%+ in 2009; do not see oversupply as being an issue... Asked why they issued debt a few weeks ago- says they issued for the long term due to the length of supply contracts that they had to sign; need to make prepayments on some of these contracts; locked in a low cost of raw materials; believes will save them 20-30% in costs in the long term... looking at acquisitions to strengthen supply... looking at the US but notes that subsidies here are not as strong as other regions.