(WFR) shares have plunged from about $4 to just below $2 recently, but they seem to be on the rebound now. This company makes silicon wafers that are used to manufacture solar panels, computers, and other products. As most investors know, the solar industry has been impacted by a glut of inventory and reduced demand as debt-strapped governments around the world cut subsidies for solar energy. However, the company recently reported better than expected financial results.
In the second quarter of 2012, it sold 144 megawatts versus just 23 megawatts in the same period last year. This boosted cash flow substantially, to $114 million for the second quarter. This was a big improvement from $16.9 million in cash flow for the second quarter of 2011. The company reported a loss of $61.3 million, or 27 cents per share for the quarter, so it still has challenges, but at just $2.50 per share, the stock could just about double in value according to some analysts. The average price target (as tracked by S&P Capital IQ) is $4.71. If MEMC achieves earnings of 35 cents per share for 2013, the $4.71 price target seems reasonable as it would put the price to earnings ratio at just about 13 times.
Here are some key points for WFR:
Current share price: $2.66
The 52 week range is $1.44 to $7.26
Earnings estimates for 2012: a loss of 17 cents per share
Earnings estimates for 2013: 35 cents per share
Annual dividend: None
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