China Concerns To Plague LED Stocks, Citi Says (AIXG, VECO, LEDS, EFOI, RBCN, CREE, NEXS, PHG)

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• Popular long ideas: CREE, VECO, AIXG
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• Negative Movers: Analyst Comments Hurt Some Stocks (AIXG, DQ, BQI, DB, WMS)
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Shares of Aixtron SE (AIXG), the maker of equipment for the semiconductor and LED industries, are plunging 7% after Citigroup said LED fundamentals in China are weakening due to funding issues. The bank said Aixtron will probably miss second-quarter estimates and reiterated a “sell” rating on the stock,which has slid 23% in the past month.

The news isn’t sitting well with investors as the LED Stocks Index is down 2.7%. Unfortunately, the bad news for LED stocks doesn’t end with Aixtron. Shares of Veeco Instruments (VECO) are down 3% after Citi trimmed its earnings estimates on that stock as well, also citing weakness in the Chinese market. Citi pared its price target on Veeco to $47 from $49, but sees downside risk to the mid-30s. Veeco shares have tumbled 18% in the past month.

The weakness among LED stocks is palpable today as SemiLEDs (LEDS) is also off 7%. Energy Focus (EFOI) is faltering by 5% and Rubicon Technology (RBCN) is down 2%. Cree (CREE) is fractionally higher while Nexxus Lighting (NEXS) and Koninklijke Philips Electronics NV (PHG) are acting as Index bright spots with gains of 2% each.

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Tags: AIXG, CREE, EFOI, LEDS, NEXS, PHG, RBCN, VECO