Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Wolf speed -- Ignore unavailable to you. Want to Upgrade?

To: DiB who wrote (6464)	11/13/2002 8:11:20 AM
From: straight life	Read Replies (1) \| Respond to of 10713

...still glad I bought back the Nov 15s. From yesterday's Briefing.com: 3:07PM Cree, Inc. (CREE) 19.24 +0.53: The company formerly known as Cree Research -- and now known more succinctly as Cree, Inc. -- has had an impressive few months in the market. In fact, shares in the company have returned 28.7% since we reviewed them favorably back in mid-August. By way of comparison, the S&P 500 is roughly 4.5% lower over the same time frame, while the Nasdaq is essentially flat, give or take a few points. We were favorable on Cree back in August based in large part on its ramping operational metrics. The company had just reported fourth quarter sequential revenue growth of 13%, and was targeting another 20% in sequential growth for its fiscal first quarter. As it turns out, the company's solid first quarter results, released October 17th, actually came in ahead of its own aggressive projections. On the bottom line, quarterly earnings were reported at $0.05 per share, exceeding the consensus estimate by a penny. At the same time, third quarter revenues rose 29% sequentially to $48.8 million, comfortably ahead of the consensus estimate for $45.2 million. From the standpoint of what the company does, Cree may have made the material that generates the dashboard display in your car. If not, they might have made the material that generates your cell phone display. Or it's possible absolutely nothing you own has been manufactured by the semiconductor company. Regardless, Cree's primary revenue stream is derived from selling blue and green light-emitting diodes (LED's) manufactured from silicon carbide (SiC). While it may not sound all that interesting, Cree has a solid market position as it has patents on many of its processes for SiC compounds. Fundamentally, the shares currently trade at 58.4x estimates for fiscal 2003 and carry a forward multiple of approximately 32.2x. By way of comparison, the five-year bands on its P/E multiple range from a low of 24.3x to a high of 233.6x. So while current prices may not come off as a screaming value -- mainly because they aren't -- keep in mind the company just reported first quarter sequential revenue growth of 29%, and the CEO is targeting LED sales above those record levels for the upcoming quarter. All this leaves us with the issue of how to approach Cree from current levels. Note that its recent leg higher came on progressively increasing volume. While the magnitude of its recent move has left the shares somewhat extended on a very near-term basis -- meaning a pullback or a period of consolidation are likely in order -- the strength of the prior move bodes well for the shares going forward. Look for the near-term outlook to improve considerably on a break above resistance in the range of 19.80 to 20.00. Yet also note that we would become more cautious on the near to intermediate-term outlook if Cree would fail to hold support in the range of congestion at 16.85 to 17.15. -- Mike Ashbaugh, Briefing.com ps- there's a small chart included here: biz.yahoo.com