Cree, Inc. (NASDAQ:CREE)

CAPS Rating: 3 out of 5

The Company is engaged in developing and manufacturing semiconductor materials and electronic devices made from silicon carbide, gallium nitride and related compounds.


Player Avatar TomEaton (81.96) Submitted: 8/19/2009 6:55:54 PM : Underperform Start Price: $34.93 CREE Score: +117.95

Cree is a fine company and the LED market seems to be rapidly expanding. But the P/E is higher than it's ever been, and higher than the anticipated growth rate. At a P/E of over 100, it doesn't take much to send the stock into a tailspin. The upside is already more than priced in, while the risk is not. Price pressure from competitors in the LED market will force Cree to reduce costs quickly to justify that P/E. I wish them luck.

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