The demand for LCD televisions has stalled. The price of glass is falling thanks to an oversupply in the market. Gorilla Glass is a goofy name for a product. Motley Fool co-founder Tom Gardner has heard all the complaints about Corning (NYSE: GLW), the world leader in specialty glass and ceramics, and the market has priced the critiques into its shares.

But while there might be headwinds at the moment for some of its products, those who discount Corning based on the monthly sales of its latest new thing are missing the story of this venerable company. Sure, management warned not long ago that major LCD television players such as AU Optronics (NYSE: AUO) and Sony (NYSE: SNE) would soon be buying less of its glass at a lower price. And yes, its critical display business (the glass used to build LCD TV sets) declined 5% year-over-year in the third quarter, although sales in the segment rebounded in its most recent earnings report.

But more importantly, Tom and his team at Stock Advisor view Corning as an R&D machine.

Much more than LCD
The company is constantly pumping profits into research and development, essentially creating new industries along the way. When Corning engineers made the glass for Edison's first light bulb, they weren't necessarily thinking about large-screen television sets. And when the company started making large-screen TV sets, it wasn't necessarily thinking about changing the composition of that glass in order to make it more durable and scratch-resistant (the aforementioned Gorilla Glass) for handheld devices.

In fact, according to one (possibly mythical) story reported on the blog of a New York Times technology writer, Corning invented a cousin of Gorilla Glass in the 1960s but didn't know what to do with it. The story goes that someone eventually showed a piece of it to Steve Jobs, who immediately thought of incorporating it into all sorts of Apple (Nasdaq: AAPL) products that might need to be scratch-resistant.

Stories aside, innovation is hard-coded into Corning to the point that it is an ever-changing company. From generation to generation, from decade to decade, it's a constantly evolving entity so that it could well be a different company in 10 years than what you might buy today. Corning constantly has an eye toward the next wave and adapts to capitalize on the industries that others can't yet envision.

As CEO Wendell Weeks told the Fool in a 2005 interview:

Corning has never been an easy company to categorize. Even during the explosive growth of our telecommunications business in the late 1990s, we were about more than communications equipment. While display is our fastest-growing and most significant segment today, we are not narrowly defined as a TV parts supplier.

Simply put, Corning is a diversified technology company with a unique history of innovation. We combine our materials and process expertise to solve difficult systems problems for customers. We develop unique products -- keystone components -- that enable new complex systems. We don't play in one market or industry. We invent technologies such as optical fiber, which revolutionized telecommunications networks. We invented and perfected the glass-fusion manufacturing process that enabled our leading position in the production of liquid crystal display glass substrates for desktop monitors, laptop computers, PDAs, and now, flat-screen televisions. We invented the ceramic substrate that is the centerpiece of emissions control systems on gasoline-powered automobiles and diesel engines, and we are heavily involved in the life sciences field. So, Corning doesn't fit neatly into Wall Street's industry categories.

Missing the big picture
Analysts who downgrade Corning and investors who sell their shares based on the latest quarter or the success or failure of a particular product line are a benefit for long-term investors. Adoption of Gorilla Glass is heating up. According to an article in Toronto's Globe and Mail, Corning was the big winner at this year's Consumer Electronics Show after Microsoft (Nasdaq: MSFT) announced during its keynote presentation that the newest version of table-sized Surface multitouch business computer would use Gorilla Glass. That decision was followed in short order by similar word from Motorola Mobility (NYSE: MMI), Samsung, and Sony for their tablets, smartphones, and TVs. Corning's CFO thinks Gorilla Glass could bring as much as $1 billion in annual revenue.

That's great. But a decade down the road, the primary driver could well be within its environmental technologies division. Corning's ceramic substrates and diesel particulate filters are integral in pollution control systems, which could become more important as we look for green solutions. But to try to pinpoint the exact area that will be driving Corning's success is a difficult -- and ultimately unnecessary -- challenge.

As Weeks said, "We are committed to spending about 10% of our total revenues on research, development, and engineering. We must invest in the future in order to grow through global innovation and create a sustainable stream of earnings from new products and processes."

What to watch
Tom's not ready to commit to a formal recommendation of Corning, but he feels it's definitely worth adding to your watchlist. But what should you watch for?

First, TV sales are cyclical, a condition exacerbated by a recession when people are more concerned with paying the mortgage than getting the latest flat-screen TV. As the market reacts to that cyclical nature, it might offer cheaper buying opportunities for investors.

Second, watch where else Corning's glass and ceramics are showing up. It might give us a sense of where Corning is placing its biggest bets for the future and will provide insight into the market opportunity that awaits.

Want two more companies that Tom thinks you should watch, plus three that his brother and fellow Fool co-founder, David, believes you should keep an eye on? Once you create your personalized version of My Watchlist, you'll have immediate access to our free report "Six Stocks to Watch From David and Tom Gardner." It's waiting for you when you begin building your own watchlist. Click here to get started now.

Roger Friedman owns none of the companies mentioned above, but he's definitely watching Corning. The Fool has written puts on Apple, which is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended a diagonal call position on Microsoft, which is a Motley Fool Inside Value choice. The Fool owns shares of Microsoft and Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.