Based on the aggregated intelligence of 145,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, LED lighting manufacturer Cree
With that in mind, let's take a closer look at Cree's business and see what CAPS investors are saying about the stock right now.
Cree facts
|
Headquarters (Founded) |
Durham, N.C. (1987) |
|
Market Cap |
$5.4 billion |
|
Industry |
Semiconductors |
|
Trailing-12-Month Revenue |
$596.0 million |
|
Management |
CEO Charles Swoboda (since 2001) |
|
Return on Equity (Average, Past 3 Years) |
3.6% |
|
Price-to-Earnings (CREE and S&P 500) |
103.1 and 20.9 |
|
1-Year Return |
226% |
|
Competitors |
RF Micro Devices |
|
CAPS Members Bearish on CREE Also Bearish on |
Amazon.com |
|
CAPS Members Bullish on CREE Also Bullish on |
Apple |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 9% of the 843 members who have rated Cree believe the stock will underperform the S&P 500 going forward. These bears include All-Star stockgripes, who is ranked in the top 2% of our community, and TomEaton.
Less than two months ago, stockgripes wrote that Cree's price run was dangerously close to burning out:
The stock has gotten ahead of itself. They are not the only one with LED play. Almost all the big names are playing LED's. If anything Cree is very much limited to LED.
In an earlier pitch, TomEaton shared those valuation concerns:
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.
What do you think about Cree, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
