1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Muhammad Bazil
Muhammad Bazil
Articles (192) 

CREE Has Remarkable Year After Perfecting the Light Bulb

November 25, 2013 | About:

For an investment that shows growth potential while protecting the environment, Cree Inc. (NASDAQ:CREE) is a prime choice. Based in North Carolina and founded in 1987, the company is a multinational manufacturer that produces semiconductor light-emitting diode materials and devices.

Cree has proven itself as a bear on Wall Street recently. Numerous experts and analysts are waiting in anticipation to see Cree shares pass the $80 mark. Even though the company's shares have staggered some, it is still considered a good investment. The company's 52-week high hit $76, and it is currently holding steady in the $55 to $56 range.

At the present time, the exclusive retail outlet for Cree is Home Depot, which markets light bulbs made by the company. Home Depot offers the bulbs in 2,000 of its locations. Cree, however, has indicated that it does anticipate forming other partnerships in the near future.

Cree is the company that has perfected the 20-year light bulb, resulting in its market cap doubling to $7 billion in only a year. With the goal of ridding the planet of the incandescent light bulb, it seems as though the company has started off with a bang.

What makes the Cree light bulb different? Instead of offering the flickering of fluorescent bulbs, it provides high quality, rich, warm light through the use of light-emitting diodes. While an incadescent bulb costs about $1 and costs the consumer about $7 each year for electricity if used three hours per day, a Cree bulb costs about $10 but then uses only 10 percent of the electricity, resulting in a fraction of the energy costs. Therefore, a Cree bulb costs about $1 per year to operate. Cree bulbs are expected to last for more than 20 years while an incandescent bulb will last less than two years. Therefore, a Cree bulb is a money saving device.

Cree also has earned the Energy Star qualification, which is another advantage. With the Energy Star stamp of approval, many utilities will offer rebates for those using Cree bulbs. Therefore, the Cree bulbs will be in even greater demand. Earning the proper qualification can be incorporated as a great marketing technique.

The management at Cree has been getting a bigger piece of the market space, ready to compete with the larger, more established companies such as General Electric and Koninklijke Phillips. To virtually be a newcomer in the arena, Cree is definitely holding its own and making its mark.

When it comes to investing, many experts recommend buying in to Cree at this point. If you buy in now, you can hold it and wait for the shares to pass the $80 mark, which will eventually happen. It doesn't look like there is any slowing down Cree at this point. Actually, I agree. There are only signs of growth that are waiting for this technologically advanced company.

Looking at the competitors, GE stock currently sets at $27.08 per share, which is up .63%. Koninklijke Phillips sets at $35.25 per share. When you are looking at stock value, Cree shares are worth more than the competitors. Cree has good standing, without any debt and having a significant amount of money in the bank.

Several firms have issued "buy" ratings on Cree shares. Among them is Lazard Capital Markets, who has a $75 price target on the particular stock. Jefferson Research also upgraded the stock to a "buy" rating. Overall, 13 firms have given a "buy" rating to the company while one has given it a "strong buy" rating. Fourteen other firms consider Cree as a stock that deserves a "hold" rating.

If you are looking for the perfect stock to buy, Cree is at the top of the list. With Cree's future only looking brighter, it will definitely be the best choice for the long run. Now is the time to buy as Cree stock is at an affordable price and the prices are only expected to climb even higher.

When you buy Cree shares, you can expect to profit from your investment in the long run. Therefore, I highly recommend investing in the company now before shares reach their high.

About the author:

Muhammad Bazil
Muhammad Bazil is a financial journalist and editor for a variety of websites, public policy organizations, and book publishers. He has written hundreds of published articles and blog posts on topics including budgeting, credit management, real estate and investing. His articles have been featured on the homepage of Yahoo!, MSN and numerous local news websites.

Rating: 2.6/5 (5 votes)


Please leave your comment:

Performances of the stocks mentioned by Muhammad Bazil

User Generated Screeners

kazu2016-12-15 Gori bu
mkettler0217hunting grounds
wqecapitalscreening value growth
wqecapitalscreening 1 value growth
HOLKLSUTrump Trade - Late Stage
HOLKLSUTrump Trade Group-Late Stage
jlhpersonalJason's Greenblatt - Updated L
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat