i've been whipsawed out of this baby 4 times in the past 6 months and still like it.
MEMC Electronic Materials Up on Down Day
Associated Press 07.26.07, 3:47 PM ET
NEW YORK -
Shares of MEMC Electronic Materials rose Thursday, despite most other tech stocks slidding with the rest of the market, after the silicon wafer maker said its second-quarter profit nearly doubled on a 28 percent jump in sales.
MEMC also forecast full-year profit and sales slightly above Wall Street estimates.
Shares rose $2.46, or 4.3 percent, to $60.26 on heavy volume in afternoon trading, after earlier trading as high as $61.88.
The St. Peters, Mo.-based company is shifting more of its business to solar wafers, which analysts said was a positive sign as its established blended semiconductor wafer business faces price competition.
"While we remain concerned that MEMC confirmed our channel checks that blended semiconductor wafer prices will decline quarter over quarter starting in 3Q07, we believe MEMC will fully offset this trend by successfully selling more solar wafers," said UBS analyst Stephen Chin in a client note. He said the company has shown again "that it has the capability and flexibility to shift more production to its faster growing solar wafer business as a means to offset weaker-than-expected 200mm semiconductor sales."
Chin maintained a "Buy" rating and a $77 price target on the shares.
Jefferies & Co. analyst Jeffrey Bencik raised his price target on the shares to $82 from $80, suggesting he thinks the stock will rise about 42 percent in the next year.
Bencik, who rates the stock a "Buy," noted that the solar wafers the company is shifting toward have higher gross margins than other products.
He also said the company's announcement that it will expand production is a signal that MEMC will get more than 50 percent of its total sales from solar wafers by 2010.
Analysts also said the expansion led them to expect the company to announce new solar customers in the near future.
"We believe that potential solar wafer customers are now reassured that WFR will have sufficient poly capacity, and thus the signing of any new contract could proceed," said Friedman, Billings, Ramsey analyst Mehdi Hosseini.
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