This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

LED Stock Winners: Cree, Veeco, Aixtron

Weakness in consumer spending has been one of the drags on these LED stocks, which tend to trade as a momentum stock basket. The LED stocks are viewed as being highly correlated with sales in the PC display and LCD TV market. With investor sentiment recently negative on spending, all it took was signs of life from the consumer to give these stocks a little bit of a push up. On Tuesday, there were several data points related to consumer spending that were not as bad as many investors had feared.

Retail sales data, in fact, pushed the broader equity markets higher on Tuesday. In particular, Best Buy (BBY - Get Report) put up better sales numbers than expected for August and surged ahead by more than 6%. While the LCD TV sales numbers from Best Buy weren't great, in the opinion of LED stock analyst Andy Abrams of Avian Securities, the numbers were less bad than the market expected.

Similarly, Corning (GLW - Get Report) lowered its volume guidance for the display market this week, but guided the Street lower to an extent that was not nearly as bad as the worst fears. Corning shares were also outpacing the market gains on Tuesday, even as the Street was lowering estimates, with Corning shares up close to 5%.

"Corning's numbers were not as bad as they could have been and the same was true of Best Buy. Investor sentiment overshoots, we had a little bit of an overreaction last week, and so the LED stocks are getting some opportunity back today," Avian Securities' Abrams said.

Abrams downgrade of Veeco and Aixtron to a hold last week was one of the negative news flashes that sunk these LED stocks, and that slump persisted for all of last week.

While the bleeding ended on Tuesday -- and even on Monday these LED stocks had stanched the bleeding, even if gains were minor -- many analysts that cover the LED stocks remain convinced that the stocks are still in a short-term negative window within a longer-term bull scenario. Just because retail sales were better in August than the worst case scenario doesn't mean that the market is overly confident about the upcoming holiday season. An investor could make the case, and the bet, that the holiday season will be better than the dire predictions and therefore, these beaten-down stocks present a quick profit opportunity.

However, the trading volume in Tuesday's rally didn't offer support for that argument. There may have been some short-covering on the better than expected retail sales news that was part of the Tuesday rally in LED stocks.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AIXG $7.39 0.00%
BBY $38.48 0.00%
CREE $35.03 0.00%
GLW $22.74 0.00%
VECO $30.75 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs