Hi, Will, and thanks for the pointer.
I'm already invested in their 'discard' since I own Veeco.
I'll reassess the realigned EMKR.
LEDs are subject to commoditization, like many kinds of semiconductor devices, but LED stocks as a group have not performed nearly as well as chip stocks (that's my impression, anyway). I think the reason must be that, in contrast to semiconductors, the volumes for current end markets just don't ramp fast enough to overcome the price declines. Perhaps we'll have to wait for household lighting? I have to believe that whichever companies can hang around till then will be rewarded. In EMCORE's case, having a big brother gives them extra staying power. However, that could be a while, so unless they develop other markets that can be exploited profitably in the meantime, it could remain a perennial "technology of the future."
EMCORE says GELcore has turned profitable, but is the 30-35% CAGR characteristic of a huge market in its infancy? I'm not so sure. When they say "the young JV's products can literally be found on the shelves of WalMart," are those products in the general illumination market or in some smaller niche market? If I have time, I'll go on a scavenger hunt next time I'm there.
Possibly in the near term the stock can be driven by the communications devices, the VCSELs, etc.
I've owned EMKR twice and considered myself lucky to get out about even, but I could play again if I were convinced on the risk/reward.
WT |
