This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

MEMC Electronic Is Looking to Shine

This article originally ran on RealMoney at 11:06 a.m. EDT; it's being republished as a bonus for readers.

Many market participants dread the inevitable market corrections that we suffer periodically, but if you have been building some cash reserves, they can provide some great opportunities. When the market is running like it did this past fall we often find ourselves struggling to buy stocks that have run up too much and too quickly.

When the market is undergoing a correction we can begin to stalk some of our favorites that we might have missed earlier. My main task during times of market struggle is to look for those stocks that are going to outperform once things improve.

During the most recent downturn I had an opportunity to look very hard at solar energy stocks. The group became very active a few months ago and a number of stocks in the group -- such as First Solar (FSLR), Trina Solar (TSL), Daystar Technologies (DSTI) and Ascent Solar (ASTI) -- made big moves but have pulled back with the broader market in recent weeks.

This group looks like one that has the potential to regain its momentum in a better market, particularly if oil and energy prices stay strong, which doesn't seem that unlikely. So what stocks do I pursue in the group? Do I want to buy the ones that have corrected the most or the ones that have held up well?

Typically the ones that hold up best tend to lead when conditions are better. They have some underlying demand, and those folks are generally willing to pay up more aggressively when conditions improve.

In a sector like solar energy, I prefer a stock that has particular broad exposure to the industry rather than one that is focused on a more narrow niche. That way I can avoid specific issues that may not be indicative of the group as a whole.

So what is the best way to gain broad exposure to solar energy without buying a dozen stocks? There are a couple of exchange-traded funds that may make for good plays and that I will track in my ETF Shark Alerts Newsletter , but the one thing virtually all solar energy companies have in common is that they use something called polysilicon to manufacture solar cells.

There are some companies developing alternative approaches to producing solar cells, but it is limited and it's estimated that it will constitute only 20% of the market four to five years from now. For now, polysilicon will remain the key ingredient for solar cell manufacturers, and the key here is that there is a major shortage of the material. DigiTimes estimates that the shortage of the substance will likely triple in the next few years and will persist beyond 2010.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs