ROIC, book value, and EPS growth on a 5 and 1 year basis of > 30% with an increasing trend , along with a strong Piotroski analysis makes for a strong value case. Projected 2008 growth of 40% with a current PE ~ 21 and PEG < 1 makes for a strong PE expansion case. Has performed well through the downturn and looks good as momentum play. As a growth story, companies hoping to cash in on the solar incentives in Spain and Germany prior to lower government subsidy payouts are out of time; they must deploy 2008 or receive smaller payments forward.
Major concerns to this growth story going forward will be the expansion of players in this space providing silicon, and the market choice between concentrator high efficiency traditional PV versus lower efficiency cheap new gen solar. Both may squeeze wafer pricing power, esp in near term as implied on the Q4, but there is a growing pie for both industries which will most likely outstrip supply as long as we proceed breakneck toward solar parity with oil. WFR clearly has smart ppl aware of and mitigating the pricing pressure over time and adjusting to what will be a large volume industry. On Q4 they said they will be able to hold the line on margin depsite Q1 pricing pressure.
Open to neg feedback here -- but I'm not seeing another player who has good size and a better plan of straddling the semi and solar biz similtaneously or take advantage of the spot opportunities. Will watch closely as Cramer was bearish on it today after the run up from 69 citing unspecified "concerns" creating negative push after hours.
$69.84 (01/24/08)
