MEMC Electronic Materials: Climbing the Wall of Worry

With the explosion of oil prices and implosion in the value of the dollar, a perfect storm is brewing for U.S.-based, export-oriented providers of alternative energy related products. MEMC Electronic Materials (WFR) fits that description nicely, though investors will have to climb a “wall of worry” to overcome some of the fears holding the stock back.

MEMC refines silicon, grows silicon ingots and slices wafers for electronics and solar applications. 80% of its revenues come from the semiconductor industry (projected 7.7% CAGR over the next 5 years) and 20% from solar applications (47-81% solar industry CAGR projections from Solarbuzz and Photon Consulting respectively). WFR’s revenues have grown at a 23% CAGR for the last five years and are projected to continue growing at that pace or better for the foreseeable future, according to its CEO Nabeel Gareeb.