- Rotation underway for semis (which CREE falls under)
- Multiple contraction - 24X
- Margin shrinkage (this is going to be permanent since they are going after revenue growth in lighting)
- Long term transition to LED and mass adoption. It seems that LED has leapfrogged CFL.
- Focus on brand - this is critical to longer term survival as product differentiation is going to commoditize sooner than later
- M&A - need to acquire higher margin products, higher growth potential products and make use of their cash position (good generation of free cash flow but you do not want to invest in lower margin soon to be commoditize products.)
I also think they should start looking for other channel partners. Home Depot is great but this *@#&* has been playing with CREE and Philips. Pretty sure HD is saying who can give me better margin with both of them.
Philips is really a formidable competitor. IMHO, late to the game but has brand, R&D, and channels. Their channels are also global although they are not in the hurry to cannibalize their own products (that's why they are late in the game)