Well that didn't take long. Last Friday, shares of Universal Display (NASDAQ:OLED) plunged 6.5% following the OLED technologist's mixed fourth-quarter results. But investors who remained patient have already recouped that loss -- and then some.
As of this writing, Universal Display stock has climbed 13% over the past week, capped by a 6.3% pop on Thursday. Better yet, those who purchased Universal Display at the start of 2015 are currently sitting on a tidy 40% gain:
But while Universal Display's earlier gains understandably came on the heels of its new long-term contract with LG Display (NYSE:LPL), the stock's more recent rise is the result of a different confluence of events.
1. Wall Street is taking the long view
First, most Wall Street analysts' postearnings comments on Universal Display stock were overwhelmingly supportive.
Goldman Sachs, for example, reiterated its "Buy" rating, stating among other things, Universal Display's wider-than-expected outlook was better than it first appeared. For that confusion, Goldman says investors can thank an unexpected one-quarter lag in recognizing revenue under the LG Display agreement, which meant royalties from sales of OLED TVs during the all-important holiday season will arrive in the first quarter of 2016.
Analysts at Needham & Co. also reiterated their "Buy" rating on the stock, stating "while OLED shares will probably pull back on the reset to Street Numbers, heightened activity at Samsung (OTC:SSNLF) & LG Display suggest there is significant upside to estimates over the next two years."
And both Cowen and Gabelli & Co. agreed, reiterating their own buy-equivalent ratings and each insisting there's significant upside in 2016 and 2017 if capacity expansions go as planned.
Finally, though former bear and perennial OLED skeptic Jonathan Dorsheimer of Canaccord merely reiterated his "Hold" rating on shares, he also raised his price target -- albeit only to $30 from $23 per share -- with the caveat that this is a transitional year that hinges largely on the later success of OLED TVs from LG.
In the end, after perusing analysts comments for perspective, I found myself refreshed so many were properly taking a decidedly capital-F-Foolish long-term view.
2. Imminent Apple Watch Launch launch next week?
Next, the same day as Universal Display's quarterly report, Apple (NASDAQ:AAPL) sent out tantalizing invitations to an unexpected March 9, 2015, event containing the words "Spring Forward." That seems to indicate Apple could move up the previously announced April launch of its Apple Watch to next week.
And though previous supply chain reports have already suggested LG Display will provide small OLED screens for the Apple Watch, Universal Display investors can hardly wait for the subsequent teardowns to finally, officially confirm the long-expected arrival of their company's flagship technology in Apple's ecosystem. Again, the Apple Watch won't necessarily provide a huge boost to Universal Display's material sales given its small physical display size, but could mean the folks in Cupertino have bigger plans for OLED in the pipeline.
3. Another Apple Watch supplier?
Then on Monday, Korean news site The Electronic Times reported fellow Universal Display customer Samsung Display has apparently agreed to become a second supplier for the second version of the Apple Watch, to go on sale either the back half of this year or in early 2016. In the meantime, The Electronic Times notes, LG Display is still widely expected to be the sole supplier of OLED screens for the first-gen Apple Watch
While this is still technically a rumor based on "unnamed industry sources," it would make perfect sense for Apple to diversify suppliers for such a crucial component of its new device. This would also be good for Samsung Display (and, in turn, Universal Display), considering after it suffered through weak demand for high-end OLED smartphones last year, it revealed it was seeking to diversify its own business by selling excess OLED capacity to other customers outside of Samsung Electronics.
4. Samsung's new OLED TV trademarks
Finally on Thursday, Korean media outlet Yonhap News reported Samsung has applied for trademark applications for five variant names of its own OLED TVs in the country -- specifically "Super UHD OLED," "Ultra Super OLED," "Samsung Super Ultra OLED," "Ultra OLED," and "Super UHD." Yonhap further suggested this "seems to be a pre-emptive move against a battle over similar brands with home rival LG Electronics in the premium lineup."
Last May, you might recall Universal Display stock dropped after Samsung temporarily abandoned plans to build a next-gen OLED television manufacturing facility. At the time, the move was blamed on difficulties in the more complicated production process for Samsung's large form factor RGB-OLED displays. The following month, however, Universal Display highlighted several new advancements in OLED technology, including one specifically aimed at improving the manufacturability of the very same RGB-OLED TVs Samsung wants to build.
Of course, I can't tell whether Universal Display's new tech has a hand in Samsung's latest trademark move, or whether Samsung is simply filing for the trademarks to prevent competitors from doing so. But if this does signal a return by Samsung to the OLED TV market after last year's challenges, it would portend yet another massive upward catalyst for Universal Display.