Topic: How To Invest

Can I get your opinion on Cree Inc.?

Article Excerpt

Cree Inc., $62.93, symbol CREE on Nasdaq (Shares outstanding: 117.9 million; Market cap: $7.4 billion; www.cree.com), makes semiconductor materials and electronic devices out of silicon carbide (SiC). Highly efficient light emitting diodes (LED) account for about 65% of Cree’s revenue. The LED market has an established field of competitors, with five companies controlling about 75% of sales. In addition to Cree, these firms include Tokyo-based Nichia; Sunnyvale, California-based OSRAM Opto Semiconductors; San Jose, California-based Philips Lumileds; and South Korea’s Seoul Semiconductor. These five also control most of the patents needed to build LEDs. That makes the cost of entering the market very high, which should keep competition limited. As well, the market for LED lights should continue to grow as they become more comparable in performance and price with other forms of lighting. The stock moved up in early March 2013, after the company boosted its forecast for the three months ended March 31, 2013. That outlook was confirmed when…