CREE

Cree Inc

TMT


Presented:02/09/2016
Price:$29.36
Cap:$3.01B
Current Price:$13.80
Cap:$1.75B

Presented

Date02/09/2016
Price$29.36
Market Cap$3.01B
Ent Value$2.45B
P/E RatioN/A
Book Value$23.39
Div Yield0%
Shares O/S102.52M
Ave Daily Vol1,353,242
Short Int14.78%

Current

Price$13.80
Market Cap$1.75B
Cree, Inc. operates as innovator of lighting-class light emitting diode (LED) products, lighting products and semiconductor products for power and radio-frequency (RF) applications. It operates through the following segments: LED Products, Lighting Products, Power and RF Products segments. The LED Products segment includes LED chips, LED components and SiC materials. The Lighting Products segment consists of LED lighting systems and bulbs for the commercial, industrial and consumer markets. The Power and RF Products segment includes power devices and RF devices. The company was founded by Calvin Carter Jr., John Palmour, Neal Hunter, Eric Hunter and John Edmond in 1987 and is headquartered in Durham, NC.

Publicly traded companies mentioned herein: Cree Inc (CREE)

Highlights

The presenter is short shares of Cree (CREE), highlighting increasing margin pressures from competition and what he perceives to be misplaced investor confidence in sustainable first-mover advantages and value from potential spin-outs. His channel work leads him to believe ASP in the high power lighting business may decline 30% - 40%, significantly more than Street expectations. He believes there is another 30% of downside from the current share price, targeting $20 on CREE’s fiscal 2017 numbers. He bases this target on $1.00 in 2017 EPS, a 16x multiple, and $4 of net cash on the balance sheet.

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Idea Discussion

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