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To: pompsander who wrote (6551)	12/19/2002 2:48:14 PM
From: w2j2	Respond to of 10713

IMHO, we have a buying opportunity coming up. Market issues, such as war, should push Cree down even more over the next 6 weeks. wj

To: pompsander who wrote (6551)	12/19/2002 3:27:32 PM
From: Don Green	Respond to of 10713

Cree Assessments & Analysis Based on 12/18/2002 close price: $17.77 Guru Analysis dg> (FWIW) CREE, INC. (cree) For the Small Cap Growth Investor Report Card PROFIT MARGIN: [FAIL] RELATIVE STRENGTH: [FAIL] COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: [FAIL] INSIDER HOLDINGS: [FAIL] CASH FLOW FROM OPERATIONS: [FAIL] PROFIT MARGIN CONSISTENCY: [FAIL] R&D AS A PERCENTAGE OF SALES: [PASS] CASH AND CASH EQUIVALENTS: [PASS] INVENTORY TO SALES: [PASS] LONG TERM DEBT/EQUITY RATIO: [PASS] "THE FOOL RATIO" (P/E TO GROWTH): [FAIL] AVERAGE SHARES OUTSTANDING: [PASS] SALES: [PASS] DAILY DOLLAR VOLUME: [FAIL] PRICE: [PASS] INCOME TAX PERCENTAGE: [PASS] Detailed Analysis Guru Score: 46% PROFIT MARGIN: [FAIL] This methodology seeks companies with a minimum trailing 12 month after tax profit margin of 7%. The companies that pass this criterion have strong positions within their respective industries and offer greater shareholder returns. A true test of the quality of a company is that they can sustain this margin. cree's profit margin of -64.75% fails this test. RELATIVE STRENGTH: [FAIL] The investor must look at the relative strength of the company in question. Companies whose relative strength is 90 or above (that is, the company outperforms 90% or more of the market for the past year), are considered attractive. Companies whose price has been rising much quicker than the market tend to keep rising. cree's relative strength is unavailable at this time. Hence, an opinion cannot be rendered. COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: [FAIL] Companies must demonstrate both revenue and net income growth of at least 25% as compared to the prior year. These growth rates give you the dynamic companies that you are looking for. These rates for cree (-37.50% for EPS, and 13.06% for Sales) are not good enough to pass. INSIDER HOLDINGS: [FAIL] cree's insiders should own at least 10% (they own 2.70%) of the company's outstanding shares. This does not satisfy the minimum requirement, and companies that do not pass this criteria are less attractive. CASH FLOW FROM OPERATIONS: [FAIL] A positive cash flow is typically used for internal expansion, acquisitions, dividend payments, etc. A company that generates rather than consumes cash is in much better shape to fund such activities on their own, rather than needing to borrow funds to do so. cree's free cash flow of $-1.44 per share fails this test. PROFIT MARGIN CONSISTENCY: [FAIL] The profit margin in the past must be consistently increasing. The profit margin of cree has been inconsistent in the past three years (Current year: -65.44%, Last year: 15.71%, Two years ago: 28.11%), which is unacceptable. This inconsistency will carryover directly to the company's bottom line, or earnings per share. R&D AS A PERCENTAGE OF SALES: [PASS] cree is either maintaining the same levels of R&D expenditures(currently $28.0 million) or increasing these levels which is a good sign. This allows the company to develop the superior technology and new products that will put everyone else out of business. This criterion is particularly important for high-tech and medical stocks because they are so R&D dependant. CASH AND CASH EQUIVALENTS: [PASS] cree's level of cash $101.1 million passes this criteria. If a company is a cash generator, like cree, it has the ability to pay off debt (if it has any) or acquire other companies. Most importantly, good operations generate cash. INVENTORY TO SALES: [PASS] This methodology strongly believes that companies, especially small ones, should have tight control over inventory. It's a warning sign if a company's inventory relative to sales increases significantly when compared to the previous year. Up to a 30% increase is allowed, but no more. Inventory to Sales for cree was 8.58% last year, while for this year it is 11.56%. Although the inventory to sales is rising, it is below the max 30% that is allowed. The investor can still consider the stock if all other criteria appear very attractive. LONG TERM DEBT/EQUITY RATIO: [PASS] cree's trailing twelve-month Debt/Equity ratio (0.00%) is at a great level according to this methodology because the superior companies that you are looking for don't need to borrow money in order to grow. "THE FOOL RATIO" (P/E TO GROWTH): [FAIL] The "Fool Ratio" is an extremely important aspect of this analysis. Unfortunately, cree's "Fool Ratio" is not available due to a lack of one or more important figures. Hence, an opinion cannot be given at this time. The following criteria for cree are less important which means you would place less emphasis on them when making your investment decision using this strategy: AVERAGE SHARES OUTSTANDING: [PASS] cree has not been significantly increasing the number of shares outstanding within recent years which is a good sign. cree currently has 73.0 million shares outstanding. This means the company is not taking any measures, with regards to the number of shares, that will dilute or devalue the stock. SALES: [PASS] Companies with sales less than $500 million should be chosen. It is among these small-cap stocks that investors can find "an uncut gem", ones that institutions won't be able to buy yet. cree's sales of $161.1 million based on trailing 12 month sales, are fine, making this company one such "prospective gem". cree passes the sales test. DAILY DOLLAR VOLUME: [FAIL] cree does not pass the Daily Dollar Volume (DDV of $37.0 million) test. It exceeds the maximum requirement of $25 million. Stocks that fail the test are too liquid for a small individual investor and many institutions have already discovered it. PRICE: [PASS] This is a very insignificant criterion for this methodology. But basically, low prices are chosen because "small numbers multiply more rapidly than large ones" and the potential for big returns expands.cree with a price of $17.77 passes the price test. The price should be above $7 in order to eliminate penny stocks and below $20 since most stocks in this price range are undiscovered by the institutions. INCOME TAX PERCENTAGE: [PASS] cree's income tax paid expressed as a percentage of pretax income this year was (22.00%) and last year (44.51%) are greater than 20% which is an acceptable level. If the tax rate is below 20% this could mean that the earnings that were reported were unrealistically inflated due to the lower level of income tax paid. This is a concern. nasdaq.com

To: pompsander who wrote (6551)	12/20/2002 10:32:19 AM
From: Ron	Respond to of 10713

I agree a great buy opportunity is shaping up again. I still hold some CREE very long term, but lately have also been buying on hard dips and selling on strong surges up. CREE seldom if ever disappoints with this method. CREE is approaching a real sweet spot for earnings growth this coming year, imo. So let 'er rip on the down side. Will just result in a nicer snapback later on :) By the way even the CTHR connection is looking better and better. Their business is way up. Cheers Ron