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Fuel From the Sun

Yesterday, Cramer gave his first stock – General Cable – in a four-part series dedicated to those companies that were put on sale for all the wrong reasons after last week’s sell-off. Today’s pick is First Solar , arguably the best solar power stock out there.

Remember: The key to this strategy is to find companies that reported blowout numbers before the correction. These stock are insulated from the downside, and they have unrealized upside – their great numbers aren’t reflected in the price because the sell-off took them down. First Solar fits this profile perfectly.

On Feb. 13, First Solar reported earnings of 12 cents per share when the Street expected a loss of 7 cents. Revenues clocked in at $52.7 million, while the Street predicted $42.6 million. Not to mention, sales for 2007 are projected to be $310 million to $340 million. The analyst consensus was $250 million.

The stock jumped from $34 to $43 a share in a day. Then it went on to peak at $52.70 on Feb. 26. The stock had major mojo. It ran into the sell-off like a speeding car into a brick wall. Even though the stock has recovered, it’s still trading at $47.62, that’s 10% percent off the high. Sounds like a good chance to back the truck up.

Don’t think First Solar is some hippy stock because it’s not. It’s a real company with plans to offer non-subsidized solar power that’s competitive with good old-fashioned environmentally unfriendly power by 2010.

Simple economics dictates First Solar will be a winner. It generates more power for less money than its competitors by steering away from silicon solar cells, the costly industry standard. It also has the highest margins in the industry at 40%. Best of all, Cramer thinks the numbers are too low.

The fuel for this stock in the future won’t come from the sun, Cramer says, it’ll come from beating expectations. The consensus on the Street is that First Solar will earn 26 cents a share this year. Preposterous, says Cramer. It earned 12 cents a share in just the last quarter of 2006. It’s going to blow that estimate away if it keeps delivering the results the way it has – and there’s no reason to believe it won’t – FSLR is best of breed.

Bottom Line: Cramer searched through the rubble to find you a discount on a stock that just reported great numbers. He found First Solar. You might want to back up the truck on this one before it really gets going.

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Questions? Comments? madmoney@cnbc.com

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