Follow Your Heart But Check The Ticker: First Solar, Inc. (FSLR), LDK Solar Co., Ltd (LDK)

Although Yingli Green may be a takeover target in some sort of Chinese solar consolidation scenario, investors shouldn’t buy in on these hopes. Another name in the space, LDK Solar Co., Ltd (NYSE: LDK), has also been bandied about as a takeover target. But as Fellow Fool Travis Hoium wrote in June wondering how this company keeps its doors open LDK Solar was only a few years ago a $70 stock and traded to 71 cents (!) in October, almost a 99% loss from its highs.

LDK numbers are even worse than Yingli Green’s with a -121.74 % return on equity and total debt of $3.13 billion to total cash of $111.86 million. Save propups from the Chinese government and infusions of cash from the China Development Bank, Chinese solar companies like LDK Solar would likely have folded years ago considering its operating margin is -60.78%.

Follow Your Heart But Check The Ticker

Sure, it’s a wonderful feeling when a company is doing good and you have a conviction hold in it. But it’s even better if it’s making you money. For companies like Chinese solar stocks the political risks are substantial including foreign tariffs, overseas energy subsidies, and Central government support (or lack of it). There are other socially responsible companies out there, even in the renewable energy space, that are much less risky. Even First Solar’s future is looking so bright it’s gotta wear shades as it moves away from subsidies that can be yanked away on a moment’s notice. It also has the California energy mandate in its corner.

But don’t be blindsided by the sun stocks. Follow your heart but check the ticker and watch the news for political momentum on solar energy. Then and only then can you bask in the sun.

The article Follow Your Heart But Check The Ticker originally appeared on Fool.com and is written by AnnaLisa Kraft.