One that got away...

Last week I was looking at MEMC Electronic Materials (WFR). It was sitting at $60 and with a $78 price target (+22%), a +25% 1 year growth target and a PEG of 0.6. In addition there was a very compelling article in Kiplinger's about what this company specializes in.....providing silicon wafers to the semiconductor industry as well as the solar industry. As you may have seen from the INTC conference call, CPU demand is high (thus silicon too) and the solar industry is red hot with double and triple digit growth rates foretasted over the next 5 years. As such, one would think that WFR is uniquely positioned to supply all that demand....and as such blow past analyst expectations (which are already in great shape).

And then I waited....and on Friday it went up 20% to about $70. Based on the following news:

In a note to clients, UBS said MEMC signed a 10-year deal to sell $7 billion to $8 billion worth of solar wafers to Conergy, and expanded its original 10-year deal with Gintech by another $700 million, for a contract now worth $3 billion to $4 billion.

Embedded in that same Friday message were these two nuggets:

1. UBS estimated that MEMC still has enough polysilicon left to sign one more customer for a 10 year deal worth $2 billion to $3 billion.
2. UBS maintained its "Buy" rating and raised its share price target to $85 from $77

Having seen the new target at $85 (vs. the price of $70) that means that there is still ~21% room left...so I picked up some shares. It rose to about $75 but has settled in about $73 now. We will see where this one will take us....