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Cree, Inc. Message Board

  • trout1022 trout1022 Mar 2, 2013 9:23 AM Flag

    Going Much Higher

    Below are some reasons I think we are going much higher in the this quarter, this year, and next year.

    1) Management is in a unique position where they literally control what they want to report for EPS. This is because CREE is the technology leader but has passed most of the gains on to the customer. The fact they are starting to raise margins says they see strong growth in the sector and it is sustainable. Management would not raise guidance and improve margins unless they were sure it was sustainable.

    2) Approximately 100% annual lumen growth over the last two years. This is huge because once the falling LED prices slows the growth goes to the top and bottom line. They did this the last two years and growth should be stronger the next two years.

    3) There is still operating leverage to be found in the factories getting more out existing MOCVD reactors and going to larger wafers.

    4) Obama and potential accommodating legislation.

    5) Strong technical action after a huge move higher - looks like accumulation.

    6) No retail investors allows smart money an exit in the future. Just look at this board - dead on the retail side.

    7) look at the 13Fs - many new hedge funds building positions - I will list a few if there is interest.

    8) The story is going to be a easy sell to investors and customers - green energy and saving money.

    9) Payback dynamics improve everyday and become easier and easier to sell to customers.

    10) Seasonly strong summer coming with best LED payback and cost dynamics ever.

    11) Management say they don't have clarity in current quarter but they must see good things because they are not dumb - see number 1.

    Which reason is your favorite?

    Trout

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Remember this thread "shorts"?

    • If you want to understand what is happening in this stock, the LED industry, and the future holds read this thread. Take a look at the dates - who is right and wrong - and what the future holds. If you are here today you have a huge opportunity.

      Trout

      There is a lot of noise here - if you want to understand what is happening read ledinside or the fool boards.

    • We are in the early innings of a lighting revolution - this will be a good short in a couple of years at a much higher price - when competition is closer on the tech side - and the replacement business is slowing because of high adoption rates (over30%) and long lifetimes of LEDs. Until then, the shorting is a short term play ( think days/weeks not months) as they stock gets over extended.

      Some indications that the market and CREEs run is just starting 1) Harris and Harris (a vc firm that owns part of Brideglux hasn't moved at all) 2) other LED plays are down significantly (LEDS, CRUS, RMBS, RBCN, etc) 3) Adoption rates for LED (on a unit basis not revenue basis) is below 5% 4) the sales from the CREE lightbulb are insignificant - it is just important as a mechanism to market the only Vertically integrated US LED company and their brand 5) lighting is the big opportunity for LED - no way we don't hit all new time highs on the biggest opportunity and story 6) the 50% move this year indicates everyone knows these points are true

      Trout

    • Davebugs: Any new thoughts on management after today?

      • 1 Reply to trout1022
      • This was a good move that had to have taken significant time to develop. It'll be great when they are actually in the HD's and available.

        This - just like originally cheap LED Cmas lights a few years ago should really continue to rise awareness, reduce cost, add to get adoption to the next level.

        Trout - I still don't have a very high opinion of mgmt being a shareholder for several years. I also sold 80% of the shares I had long ago at significant profit. The shares that remain (I didn't average down on CREE really) are almost green after todays runup.

        Gonna be a lot of shorts hurting. Especially if the overall market doesn't pullback. Could be an exciting week. I may end up writing some calls...

    • You have one more reason if one looks at this morning news regarding Cree's new line being sold at Home Depot, and the impact it is having on premarket activity

    • Management just raised guidance and came out with "the biggest thing since the lightbulb" - a $10 to $13 consumer A19 light with a payback in under a year. Big news!

    • Can you elaborate on 5)?

      I remain a bit wary about management. In the past the have missed on guidance that they themselves issued . I so like the way they have built a strong vertically oriented company. RE: buyout... if anyone is going to buy them my bet is on Osram.

      • 1 Reply to blackoutbuzz
      • I can elaborate on my thinking for 5) - but know I'm not a technical expert. For what was a giant move after earnings we are 10% higher than that close - bands are now tight - short interest is higher ( so it wasn't covering) - looking at the 13fs there are a number of new hedgies in the name - 90% of the time there is intraday weakness buyers come in force - those things tell me it is accumulation which if correct it is great. If hedgies are getting in at an average of $45 they are going to want to see something significantly higher. Anyone else out there with technical insight? The move looks like NFLX which I think is going higher also.

        If Osram does that they need to spin off first from Siemens.

    • I don't think you see a buyout for two reasons 1) management would not compress margins before placing the company for sale and 2) you don't start a CREE marketing campaign before you sell the company. if GE wanted more exposure to LED I think they buy something like Bridgelux for a fraction of the cost.

    • A well thought out ON TOPIC post? You sure you're in the right place?

      I agree with most of your points, perhaps not as fully as you. I'm a little more suspect of mgmt's ability to take care of themselves now and later and perhaps shareholders just later.

      And the recycled idea of new posters of a GE buyout I don't believe will ever happen. I think all that consolidation is over, mgmt made CREE unappetizing and it wasn't taken over when it could/should have been. Glad I lightened up back then.

      Still no debt (actually left over from before LED days), and disruptive technology. The Chinese JV however makes it easier for them to steal the iP quicker and more thoroughly.

      I'm a long time holder and somewhat cyclical trader of CREE.

      Glad to see an on-topic post!

 
CREE
30.51-0.05(-0.15%)Jun 2 4:00 PMEDT