Before Cree (Nasdaq: CREE) releases its earnings next week, it's time to take a look at why I think Cree is still a great buy this year.

Efficiency at the right time
The talk about CO2, renewable energy, and reliance on oil really only leads to one energy certainty for the future: Efficiency will be a winning strategy. And better yet, efficiency that's really, really easy will be a no-brainer.

The reason LED lighting is taking off is the power advantage LEDs have over traditional lighting sources. General Electric (NYSE: GE) is also pushing LEDs, but Cree is the most focused way to invest in an LED future.

Explosive growth
In the most recent quarter, Cree grew revenue 59% from a year earlier, and it is expecting more growth from sources such as retail sales at Home Depot and a recent signing with Denny's. These types of agreements will help drive revenue to an expected $270 million to $280 million this quarter.

Balance sheet
It isn't often you see a company growing at 59% with no debt and $1.1 billion in cash and equivalents, but that's exactly what Cree offers. This gives management flexibility to make capital investments or make acquisitions, although the rumors of Cree buying Aixtron (Nasdaq: AIXG) recently were a little misguided.

History of beating expectations
One of the first things I look at when researching a stock is to look at the performance in the last four quarters versus analysts' expectations. If a company is falling behind expectations, it tells me investors will be uneasy, and if a company consistently beats expectations, analysts haven't priced in enough growth. Cree definitely falls in the latter category beating expectations by an average 11.2% each quarter. Analysts are catching up to the story. This is something worth watching next week.

Cree isn't without its risks. New technologies like OLEDs from Universal Display (Nasdaq: PANL) could impinge on cell phone backlighting and other products, but for now Cree sees plenty of growth in its future.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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