Sunday, December 9, 2012

MEMC Electronics WFR HIGH RISK JUNK BOND Yielding 11%

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,

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