One Reason Why Cree (CREE) Stock Is Advancing Today

Shares of Cree (CREE) are rising after Infineon (IFNNY) agreed to purchase its Wolfspeed Power unit.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Shares of Cree (CREE) - Get Report  are gaining 11.73% to $28.02 on high trading volume after closing a deal with Infineon (IFNNY) for the sale of its Wolfspeed Power unit for $850 million, Bloomberg reports.

Cree is a Durham, NC-based LED, lighting and semiconductor producer. Almost 3 million shares of the company have traded hands so far today vs. the stock's average of just under 1 million per day.

Cree's Wolfspeed makes compound semiconductors and power-management chips. Infineon's purchase of the unit is in line with the company's intent to expand in fast-growing markets such as electric cars, renewable energy and the Internet of Things.

Infineon is a German semiconductor company.

For Cree, the sale means the company can focus more heavily on its core business of LED lighting.

Last year the company had planned an initial public offering for Wolfspeed, but CEO Chuck Swoboda said in a statement that the deal with Infineon "unlocks value" for the company.

Separately, TheStreet Ratings rated this stock as a "hold" with a ratings score of C-.

The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, TheStreet Ratings finds weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

You can view the full analysis from the report here: CREE

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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