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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: mtnlady who wrote (15672)1/19/2000 8:29:00 PM
From: John Stichnoth  Read Replies (2) of 54805
 
Re CREE: If I may (and even if I might not! <g>)--The question that has to be asked about CREE and similar companies is not their percentage growth in sales, but the ultimate size of the market they are attacking. Gorillas are big companies selling products that have crossed into mainstream use. Is the SiC market ultimately big enough?

            Sales         Mkt Cap     Price/Sales
            -----         -------     -----------
CSCO        13.4 Bn       383.2 Bn       28.6 x
INTC        29.4 Bn       341.2 Bn       11.6 x
CREE         0.08 Bn        2.7 Bn       35.6 x

There is a difference in scale here. This is why many would term CREE a shiny pebble. It's looking really good, and it might turn out to be a diamond, or gold nugget, if we bend down and pick it up. It could make some nice money. But, it won't lead to further riches if it is just sitting there in the stream and is not part of a vein running deep into the mountain. [Did somebody around here advise against overusing metaphors? Naah!]

btw, There are lots of shiny pebbles around. ZICA and NSATF are two that I've ruminated over in the last few months. Is CREE like them, or like CSCO and INTC? The first two are definitely NOT gorilla material.

Best,
John
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