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

To: Harpo who wrote (953)	11/27/1998 12:36:00 PM
From: Toby	Read Replies (2) \| Respond to of 10714

Cree is a volatile stock with historical 70% growth rates. Their PS and PE earnings ratios gyrate between 4-12 and 25-75 respectively. Their product is a low cost alternative to superior products sold by Japanese companies and increasingly by Hewlett Packard, the gorilla in the LED marketplace. Cree is at the top of their historical price ranges. Either you can buy the story, that their other product lines: moissanite, blue lasers and power electronics will kick in soon to keep earnings growth up, or else they will continue to push the costs of blue and green LEDs down to keep their earnings growth going, or you can see the stock as a short right now, bound to correct to its historical range. The think there is a bubble now, and there is little more upside in the cards. There is a lot of downside if the competition squeezes Cree's margins, which is usually the case for a company selling a commodity at the lowest prices on the market. Even if Cree cruises along, at a PE around 70, Cree has about 6 months of expectations to fulfill before any more upside is justified. SiC is not the Internet. It's a grubby industrial product which competes on pure price in the LED market against better GaN/sapphire LEDs, and is pre-emerging in every other market. Yet, Cree is reaching the Yahoo/Amazonosphere. I don't see it and have begun building a short position which I'll add to in the mid 40's if Cree sees that this year.