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To: briank who wrote (2286)	2/24/2000 9:18:00 PM
From: sandintoes	Respond to of 10713

Fool's Double on Cree fool.com Cree Creates a Double By Paul Larson (TMF Parlay) February 24, 2000 Cree Inc. Ticker: (Nasdaq: CREE) Phone: 919-313-5300 Website: www.cree.com Price (2/24/00): $166 3/4 How Did It Double? One of the best performing stocks over the past 12 months is that of Cree, Inc. The company has seen its shares go from near $15 a share a year ago to over $160 at today's writing, which is more than enough of a rise to grab our Foolish attention. There have been two primary factors behind Cree's meteoric rise. First, the company has reported impressive and improving financial fundamentals. For nine straight quarters the company has posted higher sales and net income than the same period in the previous year. The most recent quarterly results are typical of what Cree shareholders have come to expect: calendar Q4 1999 Q4 1998 % Change Sales $23.9 $14.0 70.5% Gross Profit $12.7 $6.6 92.5% Net Income $5.8 $2.8 102.9% EPS $0.18 $0.10 80.0% Gross Margin 53.2% 47.1% Net Margin 24.2% 20.3% (in millions, except EPS) Beyond impressive profit growth, Cree has seen increased excitement about the next generation technologies the company is working on. Cree has been investing heavily into research on blue lasers, which is something that has awesome commercial potential if some of the current problems can be solved. Cree has proven itself to be adept at identifying technologies that have real potential and then researching to bring scientific theory to commercial reality. Clearly, the market is expecting more of the same success from Cree in the future. Cree has also raised the floor on its stock in recent weeks. On January 18, the company had a secondary offering of 3.289 million shares at $85 1/8, bringing Cree an additional $266 million in cash fertilizer to further grow its business. The shares have more than doubled in just the past month alone, no doubt thanks partially to Cree's underwriters singing the praises of the company. While the color blue, as in blue light emitting diodes (LEDs) and the potential of blue lasers, is extremely important to the company's fortunes, Cree shareholders are feeling anything but blue after seeing the value of their stock increase tenfold over the past year. Business Description Cree was started in 1987 by a group of scientists from North Carolina State University who were interested in the use of silicon carbide (SiC) as a semiconductor material. The research into SiC has paid off, and now the company makes a wide variety of chips and diodes that work at higher temperatures and voltages than typical semiconductors. Cree is today's world leader in SiC semiconductor production. The company also makes blue LEDs, which round out the LED color spectrum and are more intense than the red or green LEDs that have been around for years. Cree's LEDs are beginning to be used as a light source in everything from car dashboards to wireless phones to large, full color displays, like those found in sports arenas. Cree is also putting significant research efforts into the commercial development of blue lasers. Blue lasers have a shorter wavelength than red lasers, which means they can potentially increase to a large degree the amount of data that can be stored in optical disk systems. Recently, Cree shortened its name from Cree Research. The company is based in Durham, North Carolina. Financial Facts Income Statement 12-month sales: $77.7 million 12-month income: $17.9 million 12-month EPS: $0.59 Profit Margin: 23.0% Market Cap: $5816.7 million Balance Sheet (as of 12/26/99) Cash: $43.9 million Current Assets: $67.7 million Current Liabilities: $14.1 million Long-term Debt: $4.7 million Ratios Price-to-earnings: 282.6 Price-to-sales: 74.9