Cree Shot Down
I thought Cree stock would do well again this year--cell phone sales are blasting higher and aren't Cree the guys who create that neat backup lighting? Not so, apparently. On Thursday, shares of the light emitting diode specialists fell hard 9 points after Wells Fargo downgraded the stock.
Fool.com reported that
Wells analyst Chris Montaño said the company's results "may spark investor concerns" regarding near-term growth in the market for light-emitting diodes, or LEDs - the company's main business line. "While we remain confident that the LED market's long-term prospects are very promising, given the downside surprise and guidance we think it is prudent to take a more cautious view regarding near-term LED growth," wrote Montaño. In a conference call Thursday afternoon, Cree executives said demand for LED products was slowing because of "a variety of factors," including seasonal slowdowns in production of mobile phones that use Cree's technology. A more positive view came from CIBC analyst Matthew Smith, who predicted that while growth in the mobile phone market is slowing, the company has potential to win business in the growing space for LCD TVs.
It's possible the shares were oversold today because of panic--I think most analysts on the street are bullish on the LED technology from a long term perspective.
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