Thursday, September 16, 2010

"Cree pullback presents attractive entry point, says Wunderlich" (CREE)

The stock is up a nickel at $50.90, not exactly a rocket ship but doing a bit better than the Nasdaq's down 3/10's percent.

This rec. came out on Sept. 9, the stock closed at $49.40 that day. We were sitting on it until the stock could go a whole day without trading under $50. That happened yesterday. A look at the chart shows why we aren't pounding the table, yet.
From Yahoo Finance:
Chart forCree Inc. (CREE)

The last stall at the 10-day EMA was a bit ominous as it makes the third time the line stopped a rally since the end of July. The 10-day is currently at $52.06

From Bloomberg/Businessweek:
Cree: Wunderlich Securities equity analyst Theodore O'Neill reiterated a buy rating and $85 price target on shares of Cree (CREE), a maker of energy-efficient lighting products, on Sept. 9.

"We believe the recent pullback in the share price of [Cree] has presented an attractive entry point for building a position in the stock," O'Neill wrote in a note. He said the shares have come under increasing pressure from investor fears of a cyclical slowdown in the semiconductor industry and high inventory levels of flat-panel monitors and televisions that employ the company's light-emitting diodes (LEDs).

"[T]he percentage of LED-backlit LCD monitors and televisions is about 12 percent, by our estimates, and only a fraction of those use Cree LEDs," the analyst wrote. "If that business were to disappear, we estimate it would impact Cree's [earnings per share] by less than a dime."
The company reported EPS of $1.45 in fiscal 2010 (ended June).
June 10
"Brighter Prospects for Cree" Wunderlich Initiated at Buy (CREE)
The call was issued Tuesday. Yesterday the stock closed down for the day. Today it's up $1.49 at $61.73.
Ironically, this version is from Barron's 'Hot Research' column (sorry):

Cree (CREE: Nasdaq)
By Wunderlich Securities ($60.41, June 8, 2010)
WE ARE INITIATING COVERAGE of Cree (ticker: CREE) with a Buy rating and an $85 price target on the shares. The world of lighting is finally on the verge of being completely and utterly replaced by solid-state lights and Cree is leading the industry to make this happen....MUCH MORE