Trade Update: MEME Electronic (WFR)

My Stock of the Day is MEMC Electronic (WFR).

There is no real notable news or action in the stock today, but I was looking over my list of stocks that reported strong profits in the most recent quarter.

Further, I wanted to find examples of stocks that gapped higher after reporting earnings, but have since pulled back due to the overall weakness in the market. WFR fits this bill to a "T".

The fundamentals at the company remain solid, and I still believe that the stock is undervalued relative to its growth prospects. The stock trades at a P/E of 17x next year's earnings estimates. This despite the fact that earnings are expected to grow +27% next year, and sustain that growth rate for the next several years.

Solar stocks have been on fire recently, and WFR is one of the arms dealers in the war. It supplies the materials from which many of these polysilicon (solar) wafers are made. And the company recently extended two of its long-term supply contracts, so visibility looks good.

I think the stock has a good 20-25% upside from here, for the patient investor.

long WFR