2013 Is The Year of Cree

Josef Ray is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Many stock experts concluded that Cree (NASDAQ: CREE) is one of the companies that will make an impact this year.  Cree is based in the Bull city of Durham, North Carolina. The company manufactures semiconductor materials and devices. Cree is also an innovator in the lighting industry, as it is a leading organization in research in that field. One of Cree’s most notable achievements is its advancement in the industry of light- emitting diodes or LED technology.

In 2010, Cree boasted of an LED prototype it invented, which produced a white light with a record-setting lumens per watt of 208, while drawing 350 mA of current. Cree’s innovation was deemed by experts as 14 times more efficient than the typical incandescent light bulb. It also enjoys a rich history of intellectualism, as it is originally formed by former scientific researchers from the North Carolina State University. Aside from LED and other lighting fixtures, Cree also manufactures and distributes electronic signs and signals, variable-speed motors, and wireless communication accessories.

Cree’s Market Performance and Standing

Earlier this week, Cree released its financial reports for the second quarter of fiscal year 2013. The company earned revenue of $343.3 million for that quarter of this fiscal year, which ended in December 2012. This is a 14% increase from last year’s $304.1 million, and a 10% boost from this fiscal year’s first quarter.

Cree’s GAAP net income was announced at $20.4 million, or $0.18 per diluted share. This is a staggering increase of 69% over last year’s $12.1 million, or $0.10 per diluted share. The company’s chairman and CEO, Chuck Swoboda, stated that this increase is due to Cree’s stronger sales in both LED and lighting, combined with an improvement in the company’s gross margins. Other marks of Cree’s imminent rise this year is the company’s success in teaming up with many business partners, such as the American convenience store outlet mogul Sheetz. Cree’s improvement in technology also attracted other buyers and distributors.

Will Cree Take on Its Stand

Cree’s major competitors include the multinational company SemiLEDs Corporation (NASDAQ: LEDS) and RF Micro Devices Inc (NASDAQ: RFMD). Below is a chart showing Cree’s statistics compared to its two peers in the NASDAQ stock market:

 

CREE

LENS

RFMD

P/E

84.70

-

-

52wk High

41.20

4.84

5.45

52wk Low

22.25

0.60

3.45

EPS

0.48

-1.84

-0.18

Shares

116.28 million

27.47 million

279.51 million

Mkt Cap

4.75 billion

22.53 billion

1.41 billion

Range

38.27- 41.20

0.67- 0.87

4.93- 5.20

SemiLEDs Corporation is also a player in the LED industry. It manufactures LED chips and components used in general lighting applications in commercial, industrial, and residential facilities. The company also produces UV chips. SemiLEDs currently seats at a measly 1 in the Rank in Industry and at 88 in Industry Ranks. Despite the poor stock performance, SemiLEDs is favored by companies which manufactures medical apparatuses.

RF Micro Device, on the other hand, is a company which designs and manufactures radio frequency components and compound semiconductor technologies. This company supplies other materials used for electronics in both wireless and wired communications, computer manufacturing and general lighting. RF Micro Device has the rank of 79 in Rank in Industry and at 88 in Industry Rank.

Foolish Take on Cree

Statistically speaking, no one will go wrong by investing in Cree. The company is enjoying a gradual improvement in every fiscal year quarter since 2011. The lighting industry is also alive and kicking, which makes more shareholders being interested in companies like Cree. Looking at Cree’s rivals, one can easily determine who is dominating the LED industry.


JosefRayDagatan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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