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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Sunny who wrote (23873)4/29/2000 11:29:00 AM
From: FLSTF97  Read Replies (1) of 54805
 
CREE FCF

Sunny, while I agree with you in the overall assessment on CREE look at his point from this perspective:

Wouldn't CREE be an even better investment (mostly lower risk from my perspective) if it hit all your points and then generated an extra $4 million in cash instead of "having to dilute" the current shareholders by selling more stock?

Nevertheless, I'm comfortable with current CF situation in CREE's specific case (as long as it doesn't continue too long) as I see it as the price to pay to enter some the opportunities with which they are confronted (blue laser, power devices, RF devices). These are areas requiring investments now and aren't likely to generate any operating revenues this year.

Again the CF screen is a tool. If in CREE's case it were highly positive it would make an investment decision easier. If the CF is negative and other metrics look strong then it is an indication that an investor needs to dig deeper to understand why. Let's face it, if CREE never had any hopes of positive CF, regardless of the growth rate, it would be a horrible long term investment. For proof look at some of the retail internuts. Their pile of cash won't last forever when they paste dollar bills on every product shipped out the door.

FATBOY
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