The family feud is over. The LED business is still bright, and the company raised guidance yesterday. Yet, when all is said and done, Cree (NASDAQ:CREE) doesn't seem to have budged an inch. Am I missing something?

Let me tell you a story.

I was first turned on to Cree by Rex Moore in the April 2001 issue of TMF Select (now Motley Fool Hidden Gems). Clearly, this was a company with a significant competitive advantage and a world of potential. Since then, the stock has been the most painful holding in my portfolio, bouncing from the mid-teens to the 30s, back to the mid-teens, back up to the 30s, and then back down to under $10 -- and that was just by early 2002.

By March 2002, the stock had rebounded to $14 per share, and I offered this on the Cree discussion board, trying to make some sense of the stock amidst all the insanity. At $14 per share, what was important was that long-term investors were buying the growing LED business at a reasonable price and getting the untapped potential for free. Everything else was just noise.

Now it's December 2003, and I'm going to say the same thing. The stock sits at a tuck above $17. Cree doesn't quite qualify as a value play, but at less than 30 times this year's earnings, investors are still paying a reasonable price for the explosive LED business ... and guess what? All that potential is still there. Among other things, we don't all use LED light bulbs yet, and revenues from the late-2000 Ultra RF acquisition have evaporated -- for now.

It's true: Traders probably could have made a fortune on Cree, given its volatility. But if this is a company that you want to own, what matters is that the price is reasonable -- not how much you can profit from the stock bouncing back and forth.

On the other side of the aisle, Cree has long been one of America's favorite shorts. Back in 2000, shorts cited related-party arrangements with Microvision (NASDAQ:MVIS) and Charles & Colvard (NASDAQ:CTHR). Then it was the bizarre and seemingly baseless family feud this past summer. Now, perhaps some interest remains in Cree's Conference Call Blues.

As always, investors should pay attention to what the shorts are saying. The best an investor can hope for is to take in as much biased information as possible. Cree isn't a no-risk proposition and probably isn't cheap enough for value investors. Yet, at a reasonable price for its current LED business and with a world of upside potential, I'm inclined to hold my Cree shares for now.

Jeff Hwang owns shares of Cree, and can be reached at JHwang@fool.com.