High Risk Junk Bond yielding 11%
MEMC Electronics is an
interesting company. I have to admit
that I owned this company and lost almost everything when solar energy
tanked. However, MEMC Electronics, symbol WFR, came public in 1995 and has clawed its way back to a roaring price of greater than $3.00. The management team has this company on the
mend. Moreover, it is using its
technology to provide lightness to many “off grid” communities in INDIA. SunEdison part of MEMC lights up India
I started looking at
WFR this week because of insider buying.
Insiders sell for many reasons some as simple as paying tuition for
their children or buying Christmas presents.
However, insider buying is rarely done capriciously.
I noticed a bond issued by MEMC that I like. The bond
coupon is 7.75%; maturity date is April 1, 2019. I do not like to go out much further than 5-7
years unless I am darn sure I will get my interest payments and have my
principal returned. In the case of junk
bonds, I also expect a significant capital gain. This bond was trading last week at about $84
- $86 per share which makes the yield to maturity around 11%.
Listening to MEMC
Electronics' most recent earnings call encourages me to take this risk. Please, do not invest in this bond unless you
have a very big appetite for risk. The
CUSIP is 552715AC8. Good luck!
Very Truly Yours,
TheMoneyMadam
