The Inflation Surprise Nobody’s Talking About

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As American consumers lament
rising prices, shrewd investors like you
and me are going to make a bundle as
a number of our blue chip holdings
make out like bandits.

How can this be?

Three Reasons:

1. The rising prices you see are
mostly coming from foreign
goods that are coming into the
U.S.—all driven by the falling
dollar
.

2. For the same reason foreign goods become more expensive, U.S. exports become cheaper. As a result, the world buys more U.S. goods, boosting earnings, and in doing so will boost the stock prices of our top companies.

But that’s just the beginning of the profit surprise that’s headed your way.

3. Because goods on the world
market are paid for in their home
currency, every euro, pound, and
yuan in which they pay for their
goods translates to a huge profit
boost simply because their currency
is worth more than ours—
especially as the dollar continues
to slide.

As you’ll see as the year plays out, it is precisely this double win that will make U.S. multinationals the biggest profit-takers of the falling dollar and the accompanying export boom …and why my hands itch in anticipation of the profits that we’ll make.

Why You Could Retire on My Top Pick

Like all of our top stocks for 2008, this company is profiting from the convergence of a number of world-changing trends.

As you’ll see, the company offers conservative investors one of the safest ways to profit from the falling dollar, rising oil prices, and the growing U.S. export boom along with another world-changing trend. And the company’s 561% gains over the past five years prove my point.

Who, exactly, am I talking about?

A relatively unknown $13 billion chip manufacturer that’s growing its earnings 191% quarterly, that derives 66% of its income from overseas, and whose products are front row and center in the hottest alternative energy market of all: solar energy.

I’m speaking of MEMC Electronic Materials (WFR), one of the world’s leaders in the manufacture and sales of silicon wafers to the semiconductor industry.

But what does a chip manufacturer have to with solar energy?

Most investors don’t know this, but solar cells are made of thin wafer silicon chips. Specifically, a material called polysilicon. And it happens to be the raw material that helps convert sunlight into electricity.

If you’ve never heard of polysilicon, you’re not alone. I’ll bet a few science students at your children’s or grandchildren’s school have never heard of it either. Yet, its price has risen exponentially along with the price of oil and the growth in the solar industry.

How You’ll Profit

You see, polysilicon happens to be THE KEY COMPONENT for making both integrated circuits (computer chips) and solar panels. Thanks to a new technology boom and the growing demand for solar power, these dual uses are creating a classic supply/demand squeeze for this new leader in the green energy revolution.

So it’s no wonder that the price of polysilicon has risen dramatically, from roughly $30 per kilogram in 2004 to more than $475 per kilo in 2008. And it’s all because new solar technologies are driving up demand for polysilicon around the world.

Think of it this way: Polysilicon is to the solar industry as "crude oil" is to the oil industry.

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Ironically, unlike the case with oil, whose prices rise because of dwindling oil supplies, there is no lack of supply for silica—the base component in polysilicon. You can find abundant quantities in the world’s beach sand.

The problem is that there simply aren’t enough plants in existence today to keep up with demand. So, just as the global oil industry lacks refining capacity, the same can be said for producing polysilicon.

And just like it takes years to build a new oil refinery, it takes years to build a new polysilicon plant as well. The end result has caused silicon prices as well as the fortunes of MEMC to rise exponentially. But with oil prices hitting all-time highs, even the company’s past 561% gains may pale in comparison to what lies ahead.

What Makes MEMC the Biggest Profit-Taker of All

First and foremost, the company not only supplies the raw polysilicon granules to other companies to make polysilicon wafers…

…the company also produces the wafers themselves and sells them to both the world’s largest semiconductor companies and the world’s largest solar cell manufacturers.

In fact, the company not only is the leading worldwide producer for the manufacturing industry but has a 10% share of the global market. As a result, the company’s fortunes are exploding.

Why, in the last 12 months alone the company has…

  • Nearly doubled operating profit.
  • Increased earnings growth 66%.
  • Generated operating cash flow of 42% of sales.

On top of that, the company recently signed a $3 billion agreement to sell polysilicon to another new Chinese solar manufacturer.

So it’s no wonder the stock is up 98% over the past two years and 561% over the past five…why the company has one of the highest buy ratings on Wall Street…and why 82% of the shares are owned by mutual funds and institutions.

With three dominant trends converging on MEMC, you can see why I’m convinced that a small position in this company could make your retirement years.

The company has already turned a $10,000 investment into $66,100 over the past five years. And as you can see from last year’s numbers, the company is on track to repeat this performance over the next five.

Please don’t think you are too late for the train on this one. In your free copy of The 20 Best Stocks for 2008, I’ll give you the full story on MEMC. Why your timing couldn’t be better to own this world-beater, along with my most recent buy price. Plus I’ll tell you about two more fast-growing American exporters that are on the fast track to glorious profits. The first owns a monopoly-like position in the field of global positioning. The second is another trend-riding company whose products are just as essential as MEMC’s are to the solar power industry. Up 222% since we first bought it, the company is on track to repeat these gains over the next 12 months. To receive your free copy, click here now.

To learn more about the trend-riding profit strategies that investors can profit from in the next 12 months, visit our Investing Trends section.


Article printed from InvestorPlace Media, https://investorplace.com/2008/03/retire-rich-from-the-american-export-boom/.

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