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Suntech's (STP) Impressive Growth Leads to
Gains of +40% in Two Months
Published: September 1, 2008
These are frustrating times for investors. Even if your research
and conclusions about a given company are spot-on, the shares
still might not go anywhere until other traders are once again
in a buying mood -- and who knows when that might be.
So as editor of StreetAuthority's
Half-Priced Stocks newsletter, I often remind
readers that it usually requires some patience for underpriced
stocks to converge with their true fair value. However, there are times
when the process only takes a few weeks, or even days. And when
it does, we certainly don't complain.
In our July issue, for instance, I embarked on a search for
fast-growing companies that had been unfairly punished by this
broad sell-off and appeared poised for a rebound. That search
turned up a handful of promising stocks, including Suntech
Power (NYSE: STP, $47.81), a leading provider of
photovoltaic power cells and modules. Suntech is quickly
dispelling the notion that solar energy is still a "pie in the
sky" dream.
In fact, the company has delivered impressive earnings growth of
+38% annually over the past five years (double the industry
average) and will take in over $2 billion in sales this year.
However, the shares had been battered at the time of my report,
falling from above $80 to below $35 in a few short months. But
after crunching the numbers, my calculations revealed a true
fair value of $50 per share.
Fortunately, the firm's latest quarterly results convinced a few others
of this fair value. Sales came in at $480 million,
up from $317 million last year, and adjusted earnings jumped
nearly +60% to hit $65 million. And with the company raising its
already sunny full-year outlook, investors have quickly warmed
to the stock.
Since my initial mention two months ago, SNP shares
have climbed almost +40% and are now trading at $47.81 --
closing in fast on my $50 fair value.
In August's issue, I went bargain hunting for more promising
companies that have a stake in the alternative energy field.
What I found was seven companies that offer exposure to the
growing wind power industry, yet trade below their fair value.
To learn the names of these
exciting, undervalued companies, I invite you to try out my
Half-Priced Stocks newsletter. Simply follow
this
link to learn more.
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Nathan Slaughter
StreetAuthority Staff Writer
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