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Wednesday, November 24, 2010

Opco puts a $100 target on Cree


"Yesterday we met with Cree. Our general impression is that the lull in various LED end markets will last into early C1Q11 but that the elements of a very strong 2011 are falling into place. Chinese street lighting quotations have resumed and point to renewed order momentum in 2011; design activity for next-generation LED luminaires is accelerating; and LED-LCD panel builds should pick up after the Chinese New Year. To be sure, there's a measure of uncertainty about exactly when China and LCD kick back in, but uncertainty is the building block of excess return. It's what allows you to buy a company likely facing exponential market growth opportunities for a 14x P/E (excl. cash). We'd buy it."

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