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To: jameswallen who wrote (6565)	1/2/2003 12:51:11 PM
From: JH	Read Replies (2) \| Respond to of 10713

Just a cursory look at CREE's ROE components, along with their free cashflows... CREE’s financial ratios reveal that its ROE is in the single digits, comprised of abysmally low asset turnover of around 0.3, combined with no financial leverage, and EBIT margins of around 25%. The upshot - CREE is primarily a manufacturing company for SiC wafers, but its products can’t be produced very efficiently, nor very profitably – plus its limited financial resources can’t be leveraged effectively to increase profit margins. CREE’s financial statements reveal that the company been free-cashflow negative for FIVE consecutive years, and additional capital spending will keep the company free-cashflow negative for a couple of more years. The upshot –CREE is not making money for shareholders! I'm a newbie at financial analysis, so easy, please - comments, anyone?