FBR Suggests Buying MEMC Ahead of Q2 Results

Consider buying MEMC Electronic Materials (WFR) shares ahead of the company’s Q2 results, advises Friedman Billings Ramsey analyst Mehdi Hosseini.

Hosseini write in a research note Monday morning that “field checks” find polysilicon prices “have remained strong.” He says recent manufacturing issues have been fixed and that the company is on track to meet or exceed Q2 estimates. He sees Q2 revenue of $554 million with pro forma EPS of 99 cents. Hosseini also thinks the company could provide Q3 guidance ahead of the current Street consensus of $619 million and $1.13.

Also, Hosseini notes that polysilicon production from China is not likely to be significant for some time to come: he says the Chinese polysilicon makers are suffering from an inability produce silane gasses, which are integral to the poly manufacturing process. It has become such a problem, he says, that Chinese manufacturers are coming to WFR seeking supplies of the gases.

WFR Monday is up 82 cents, or 1.3%, to $65.95.