For a warehouse, store or factory, this means light switches can go away, replaced by sensor networks that detect when and where light is needed, and respond accordingly. For consumers, it means you may never need to change a light bulb again, once LEDs fill your home.
Because LEDs are small and directional, the quality of the light is a little different than incandescent and fluorescent bulbs. I have an LED over my desk and it casts sharper, more concentrated shadows than the fluorescent bulb in the ceiling light behind me. But the battery-operated LED in my closet may never need replacing -- the same with my LED Christmas lights.
Cree is not the only player here. General Electric (GE) is a big player in LEDs. Philips (PHG) is another big player. Siemens (SI) was a big player, but it recently spun off its LED lighting unit as Osram Licht (OSR:ETR), and that stock is up 27% since it debuted last month.
There's another, related niche here: software for controlling LED systems. There are many start-ups here, and the major players are also involved. As the market matures expect buyouts.Overall, what you have in Cree is a stock that got a little ahead of itself, with a conservative management that doesn't want to promise what it can't deliver. And it's delivering plenty. After its plunge, the shares still trade with a price-to-earnings ratio of 78, which may be rich enough for traders to keep selling for a while. But this is not a broken company. Just the opposite. If stock traders keep panicking over higher interest rates, a company with organic growth, rising profits and no debt may eventually become a bargain. At the time of publication, the author owned shares of GE. Follow @DanaBlankenhor This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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